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What should the US central bank do in the foreign exchange market when the exchange rate of the US dollar falls? Maintain the stability of the US dollar exchange rate!
The US central bank has many measures to control the decline of the US dollar exchange rate. The most fundamental thing is to raise interest rates, but raising interest rates depends on the operation of the capital market. Now, for example, after the financial tsunami, the American economy is in recession. In order to stimulate economic recovery, the United States decided to maintain low interest rates for a long time in the future, so as to allow those small and medium-sized enterprises to resume production and operation, promote production and consumption, increase employment rate and increase consumer confidence. What you said about selling dollars will only make the exchange rate of dollars fall even more. However, we can appropriately purchase some value-preserving products, such as gold and Japanese yen, or issue treasury bonds to recycle the US dollars circulating in the market, or increase the deposit reserve and tighten monetary policy to maintain the stability of the US dollar. The above answer is only a rough explanation.