Sterilization
From International Political Economy
Revision as of 20:33, 24 September 2010 by Denizhan Duran (talk | contribs) (New page: Sterilization incorporates the actions taken by a country's central bank that aim to neutralize the affects foreign exchange operations cause in a currency's value. If capital inflows to a...)
Sterilization incorporates the actions taken by a country's central bank that aim to neutralize the affects foreign exchange operations cause in a currency's value. If capital inflows to a country faster than it outflows, the currency can appreciate which would lead to the loss of competitiveness, and inflation might become a problem. In this case, the central bank may need to intervene to the economy to counteract these changes and preserve macroeconomic stability.
