CORRECTED - UPDATE 1-Bank of Canada to use all tools on inflation

(Corrects second paragraph to read quarterly Monetary Policy Report instead of semi-annual Monetary Policy Report. Also fixes typos in second last paragraph.)

* Says foreign exchange intervention an option

* All policy tools will be used to guard inflation target

* Interest rates will rise to more normal levels

OTTAWA, Oct 22 (Reuters) - The Bank of Canada will use all policy tools at its disposal to achieve its 2 percent inflation target, and intervention in foreign exchange markets is always an option, bank Governor Mark Carney said on Thursday.

Asked during an Ottawa news conference following the central bank's quarterly Monetary Policy Report whether the bank was considering monetary intervention to guard against inflation, Carney said all options were on the table.

"Intervention is always an option but what is important to recognize is that the bank will conduct a sum of policies across the suite of policy tools that we have in order to achieve the inflation target, and that shouldn't be underestimated. We will set policy appropriately in order to achieve the 2 percent inflation target," he said.

"Markets should take seriously our determination to set policy to achieve the inflation target. Markets sometimes lose their focus. We don't lose our focus," he added.

Carney also warned consumers to recognize that interest rates are now at historic lows but would return to more normal levels. (Reporting by David Ljunggren; writing by Andrea Hopkins; editing by Peter Galloway)