Banco de Portugal is part of the Eurosystem, the euro area's monetary authority.

The Eurosystem – comprising the European Central Bank and the euro area national central banks – defines and implements the euro's monetary policy, with the primary objective of maintaining stable prices.

Price stability contributes to the well-being of the public, to efficiency, to sustainable economic growth and to employment.

Banco de Portugal is responsible for managing the foreign assets of the country – in euro, foreign currencies and gold – or others of its responsibility. It also manages part of the European Central Bank’s foreign reserve assets.

Banco de Portugal regulates and supervises credit institutions, financial companies and payment institutions to ensure that the funds they were entrusted to hold are secure. It applies preventive measures and sanctions.

As national supervisory authority, the Bank is part of the Single Supervisory Mechanism, the European banking supervision system, entrusted with the safety and robustness of European banks.

The Bank is the national resolution authority and in this capacity is part of the Single Resolution Mechanism, which aims to ensure the orderly resolution of the banks in failure, ensuring finantial stability.

Banco de Portugal defines and implements macroprudential policy: it identifies and assesses the risks to financial stability and proposes and adopts measures to prevent, mitigate or reduce such risks in order to strengthen the resilience of the financial sector.

Banco de Portugal regulates, oversees and sanctions the conduct of credit institutions, financial companies, payment institutions and electronic money institutions offering retail banking products and services. It also promotes the financial information and education of bank customers.

Banco de Portugal is responsible for regulating, overseeing and promoting the smooth operation of payment systems.

Regulation and oversight of the foreign exchange market

Banco de Portugal is the foreign exchange authority for the Portuguese Republic. In this capacity it regulates the operation of the foreign exchange market and oversees foreign currency trading and foreign exchange transactions (the buying and selling of foreign currency and transfers from or to foreign countries denominated in foreign currency).

Banco de Portugal issues euro banknotes and puts metal coins into circulation, although the European Central Bank has the exclusive right to authorise their issuance.

It produces, stores and puts into circulation euro banknotes, verifies the authenticity and fitness of banknotes and coins delivered to it and destroys banknotes that are not fit to be put back into circulation.

It manages the Centro Nacional de Contrafações (National Counterfeit Centre) and works with the criminal police in managing the Centro Nacional de Análise de Contrafações (National Counterfeit Analysis Centre).

Banco de Portugal is the national statistical authority. In this capacity, it is responsible for the collection and compilation of monetary, financial, foreign exchange and balance of payments statistics. These statistics are published and accessible via BPstat.

Banco de Portugal produces research and analyses of the Portuguese economy, the euro area economy and its international environment, and financial markets and systems. This work is disclosed in Banco de Portugal's publications.

Banco de Portugal participates in the activities of a large number of international organisations, especially the ECB, the SSM and other European institutions, the IMF, the BIS and the OECD. It also organises cooperation activities, mainly with the central banks of Portuguese-speaking countries.

Banco de Portugal is tasked with acting as intermediary in the international monetary relations of the State, and advising the Government in economic and financial fields.