WHO CONTROLS THE CURRENCY VALUE?
In today's modern financial world, every country has its own currency. Each country will definitely set up a central bank, a special financial institution that regulates the finances of a country. The central bank also plays an important role in controlling the value of the currency.The following is a list of the top 8 Central Banks in the world:1. Federal Reserve of United States2. Bank of Canada3. Bank of England4. European Central Bank5. Swiss National Bank6. Bank of Japan7. Reserve Bank of Australia8. Reserve Bank of New ZealandOne of the main tasks of the Central Bank is to control the value of the currency based on the current economic situation through the setting of monetary policy. The Central Bank will meet almost every month to assess economic performance, and set monetary policy to achieve the planned targets.There are 3 important elements that will be managed by the Central Bank:I. ECONOMYThe economy is the most basic thing in the FOREX world. The economy of a country influences the rise and fall of the value of the currency. Good and economic growth of a country will also lead to the strengthening of the value of the currency. The opposite will happen when the economy fails. The value of the currency will also be severely affected.Economic performance is assessed through various economic data released each month. For example NFP, unemployment, retail sales, CPI, PMI, inflation and various other data that is constantly evaluated and reported every month.II. FINANCIAL POLICYMonetary policy is the long-term planning chosen by the Central Bank. The policy will be selected based on economic performance as well as specific targets that the Central Bank wants to achieve.A strong and fast-growing economy will certainly be followed by a positive monetary policy and vice versa if the economy is negative.III. POLICY STRATEGYIn each financial policy selection, will be followed by a series or set of strategies to achieve the targets set in the policy. Typically, monetary policy will run for more than 1 year and will continue until the target is reached. As long as the target is not reached, the policy will continue to run, depending on the current situation at the time.
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