Describe the chief differences between a currency board and a central bank with a nominal exchange rate target.© BrainMass Inc. brainmass.com June 19, 2018, 2:08 pm ad1c9bdddf
First, the central bank controls the money supply by setting the nominal exchange rate target and then adjusting the money supply to achieve that target. Under a currency board system, there is no central bank. The currency board passively responds to the demand for domestic money by buying or selling foreign exchange for ...
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