FINANCIAL CRISIS

Financial Crisis of 2007-2009

Financial Crisis of 2007-2009

Financial Crisis of 2007-2009

The reason the central bank buys own currency or currency of other nations is to control the exchange rate. This is done when there is an excess circulation of money in the market. This excess circulation of money in the market reduces the value of the currency. The exchange rate of the country also affects by this. The central bank thus buys back its own currency in order to reduce the amount of money in circulation, in order to increase the value of the currency. Furthermore, the process of buying currency ...