What is the currency managed?
Currency is a currency with a exchange rate mediated by government intervention rather than allowing free to swim according to the supply and demand of the free market. Most of the currencies are managed to some extent, although the management rate varies depending on government monetary policy. Governments manage their currency to maintain economic stability at domestic and international levels to prevent radical economic destabilization caused by the movement of free market forces. Circulation can be increased or reduced by printing more money and withdrawing money from circulation. Countries can also buy and sell currency in other denominations to check the exchange rate on the domestic market; If it floods one currency on the market and destabilizes it, for example, the government can buy and hold this currency until the market disrupts, and then on the market, and then release it back to the market. Policy in countries with monetary balance of various fears and needs in favor of the market.
Interest rate changes that affect the amount of money available are another tool that the central bank uses in countries with controlled currency. Higher interest rates reduce lending, making it difficult to raise money and solving problems such as a flood of currency on the market. Lower rates increase loans and available capital and can be used to alleviate the credit crisis and support liquidity. The balance of interest rates is carried out with care to support economic development.
strong government intervention tends to frown. While many people agree that governments have the right and obligation to set and maintain monetary policy in the interest of political and economic stability, too many interventions can be considered to be covered for the funding of the crisis. Allowing free market is considered to be important to allow the national economy to remain in balance. In a country with currency controlled, like most nations on Earth, close government controls can scare foreign investors.
free market operations performed by the centerUsually, the Úl is a relatively public nature, such as if the interest rate changes are made and announced. The purpose of government activities is to maintain the most difficult concern and allow the public to see how the government is approaching the regulation and implementation of monetary policy. The managed currency is only one component of monetary policy and must be viewed in connection with other regulatory activities carried out by the government.