Central banks have an important role in the economy. Serve to maintain the trust and stability of domestic currency used in their respective countries. A stable currency exchange rate can create price stability that can help a healthy economic growth. In addition, a stable exchange rate can withstand turmoil in international trade. Examples such as the export and import sectors.
US Dollar, Euro, Yen, and Pounds are the most widely used currency as a means of payment. So the market players are very interested in these four currencies. In addition, the monetary policy of each country’s central bank can maintain international economic stability. Please also read fxtrade777 for more information about economic news.
In this article mentioned four central banks that dominate the international economy. Through currency exchange and monetary policy respectively, including:
Federal Reserve (The Fed)
Federal Reserve is the central bank of the United States. The Federal Open Market Committee (FOMC) has a responsibility in setting monetary policy. In addition, the Fed has a mandate from the United States Government in maximizing employment, price stability, and interest rates are considered fit. FOMC meetings are held at least 8 times a year. Which meeting is often discussed about the economic conditions of the United States at that time. In addition, the global economic conditions also become the subject of the FOMC meeting. Read f1pro market if you want to be a leader in the market Forex.
Currently, the Fed still sets an inflation target at 2% level which considers a safe level for the US economy. In addition, the normal level of the unemployment rate is between 5.2-5.5%.
To date, the US Dollar (USD) is still as an international payment instrument with volume reaching 44.64%.
European Central Bank (ECB)
The European Central Bank has responsibility for the monetary policy of the 19 European Union member countries of the euro currency users. ECB consists of 6 members of the executive board. In addition, the governor of the 19 central banks of EU member states. The main task of the European Central Bank is to maintain price stability and the value of the euro in the money market.
The European Central Bank has at least two meetings in a month. Which meetings often discuss economic developments and rate fixing. The ECB targets an inflation rate of between 2%.
Until now, the euro (EUR) is still a means of international payment with volume reaching 28.30%.
Bank of England (BoE)
The Bank of England has responsibility for the monetary policy of the United Kingdom. Just like other central banks, the main task of the BoE is to maintain the stability of the value of the Pound Sterling (GBP). Previously BoE made monetary policy with interest rate reference. But after March 2009 BoE used additional ways. Injecting money into the economy through a quantitative program. By way of purchasing financial assets.
Members of the MPC committee hold monthly meetings to discuss economic conditions. In addition to further steps on the next quantitative easing program. Through this meeting, MPC monitors price stability and economic conditions. The ideal inflation rate according to the BoE is currently at 2% level.
Until now, Pound Sterling (GBP) is still as an international payment instrument with volume reaching 7.92%.
Bank of Japan (BoJ)
There is a special council that determines Bank of Japan monetary policy. Which has the purpose of price stability in order to assist economic activity in Japan. Open money market operations are the current Bank of Japan (BoJ) policy. The BoJ conducts direct market intervention by injecting funds into financial markets. This is in order to control the market prices and stabilize the value of Japanese Yen (JPY) in financial markets. It can ultimately affect the interest rate of the BoJ.
Meeting members of the Bank of Japan at least 1 to 2 times a month. Usually, they discuss economic and financial conditions, JPY exchange rate and inflation rate.
To date, Japan Yen (JPY) is still as an international payment instrument with volume reaching 2.69%.