National central banks play an important role in the currency markets. It is an attempt to money supply and inflation, and / or interest rates and are often the target of formal or informal control of their currencies. And can be used in many cases, large foreign exchange reserves to stabilize the market. Milton Friedman says that the best strategy for achieving stability will be for central banks to buy when the price is very low, and when the price is too high, that is, sell for a profit based on their trading accurate information. However, the effectiveness of the central bank "stabilizing speculation" is doubtful because central banks do not fail if they are doing big losses, like other entrepreneurs, and there is no convincing evidence that they are a trading profit. The mere expectation or rumor of central bank intervention enough to stabilize the currency, but aggressive intervention might be used several times each year in countries with floating currencies dirt. Central banks do not always achieve their goal. |  |
And can be shared resources of the market easily overwhelm any central bank. Seen [6] Several scenarios of this kind in 1992-93 the collapse of the ERM, and more recently in Southeast Asia.
