Describe the chief differences between a currency board and a central bank with a nominal exchange rate target.© BrainMass Inc. brainmass.com June 3, 2020, 9:21 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 ...
This posting provides a detailed answer to the student's question.