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Definition of 'Currency Board'
A monetary authority that makes decisions about the valuation of a nation's currency, specifically whether to peg the exchange rate of the local currency to a foreign currency, an equal amount of which is held in reserves. The currency board then allows for the unlimited exchange of the local, pegged currency for the foreign currency. A currency board can only earn the interest that is gained on the foreign reserves themselves, so those rates tend to mimic the prevailing rates in the foreign currency.
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Investopedia explains 'Currency Board'
Like most of the world's developed economies, the United States does not have a currency board. In the U.S., the Federal Reserve is a true central bank, which operates as a lender of last resort, engaging in forward contracts and trading Treasury securities in the open market. The exchange rate is allowed to float, and is determined by market forces as well as the Fed's monetary policies. By contrast, currency boards are rather limited in their power. They essentially hold the required percentage of pegged currency that has been previously mandated, and exchange local currency for the pegged (or anchor) currency, which is typically the U.S. dollar or the euro.
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Search results for 'Currency Board'
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http://www.investopedia.com/articles/03/051503.asp
Currency board, central bank - what's the difference? Find out more ... The Currency
Board: Understanding The Government's Bank. July 02 2011 ...
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http://www.investopedia.com/articles/04/082504.asp
... The extreme method of pegging lies in a currency board, by which countries "anchor"
their local currencies to a convertible currency (often the US dollar). ...
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http://www.investopedia.com/ask/answers/06/reserverequirements.asp
... The most popular currency held in reserves is the US dollar. ... The reserve requirements
are established by the Board of Governors and by varying the requirements ...
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http://financialedge.investopedia.com/financial-edge/0911/10-Countries-With-The-Largest-Gold-Reserves.aspx
... Netherland Bank. (For related reading, see The Currency Board: Understanding
The Government's Bank.). TUTORIAL: Commodities: Gold. The ...
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http://www.investopedia.com/university/conferenceboard/conferenceboard2.asp
... No quarterly series qualifies for lack of currency. ... indicator." So, since few single
components meet all six criteria, the Conference Board compiles multiple ...
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http://financialedge.investopedia.com/financial-edge/0811/Currency-Positions-You-Can-Take-Now.aspx
... using domestic currency rather than dollars. As the demand abroad decreases, the
supply of dollars has grown as a result of the Federal Reserve Board's second ...
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http://www.investopedia.com/ask/answers/09/currency-affected-by-BOE.asp
... stronger pound. Valuations are highly dependent on currency flows, such as
when the Bank of Japan buys yen across the board. Thus, such ...
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http://www.investopedia.com/articles/forex/12/currency-all-time-highs-lows.asp
... dollar, but is still significant in terms of currency trading volume. Curiously,
the British pound spend the last 21 years moving all across the board only to ...
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http://www.investopedia.com/exam-guide/series-7/securities-markets/currency-forex-market.asp
... of 1934; 9.12 Over the Counter (OTC) Markets; 9.13 The Currency Market; ... 9.20 Monetarist
Theory; 9.21 The Federal Reserve Board; 9.22 International Economic Factors ...
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http://www.investopedia.com/exam-guide/series-7/securities-markets/federal-reserve-board.asp
... Securities Markets - The Federal Reserve Board. When you ... borrowers. The Fed's
board determines this discount rate monthly. Increasing ...
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