If the Central Banks of Most Countries Do Not Set

question 86

Essay

If the central banks of most countries do not set the exchange rates, why do they hold foreign exchange as one of their assets?

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Definitions:

Implied Agreement

An unwritten contract that is assumed to exist based on the actions and circumstances of the parties involved.

Competent and Professional

Having the necessary ability, knowledge, and skill to perform tasks or duties effectively and with a degree of quality expected by one's profession.

Liability

Legal responsibility for one's actions or the obligation to make restitution for loss or damage.

Client

A person or organization receiving services or advice from a professional or company.