One of the key functions of the Central Bank of each state is monetary control of the economy. This concept is quite ambient, but it will go exclusively to one of its components, or rather, the sustainable rate of national currency against the foreign. As would be incredible as it may sound in our time of a market economy, when the rate of most currencies depends on supply and demand, the central bank may actually have some impact on him. This does not mean that you can just go and say that the dollar against the euro will be equal to 1.3000. Impact on the dynamics of the course is such a tool as intervention.
In the foreign exchange market intervention is most often a single directional impact of the Central Bank on exchange rate by selling or buying a large amount of foreign currency. It should be noted, it’s pretty effective tool. At a time when the world is affected by the economic crisis, for such actions account for the majority of central banks. If we take as an example the Japanese yen, then usually it is one of the currencies of refuge and is in great demand in terms of economic instability, which likewise promotes its course. However, Japan’s economy is largely export oriented, which means it is not profitable at all expensive currency, adversely affect the competitiveness of the state produced goods and services. Consequently, intervention in the foreign exchange market, not so long ago that the Bank of Japan is probably the only method is relatively easy to deal with this difficulty.
Japan is not so close to us, and what is happening in Russia? In fact, the same thing. Intervention in the foreign exchange market for the Russian Central Bank has become one of the most important tools in the arsenal are, from the time the exchange rate was floating. CB does not make our active sales of foreign currency, the ruble would collapse just inevitable that, in turn, adversely affects the condition of each individual family and the state of our economy as a whole. Thus, the devaluation of the ruble was relatively smooth and controlled. From the above we can conclude that while the foreign exchange market on the one hand characterized by a certain self-regulation and installation of a balance, without outside interference, he was unable to maintain normal functioning. Intervention is probably not the whim of the powerful, but rather a necessity.