A currency board is an entity that

Question

Quizplus · Accepted Answer

A currency board operates by providing 100% backing for all currency issued, typically by holding a reserve of foreign currency or gold in the same amount as the currency in circulation. This creates a fixed exchange rate between the domestic currency and the backing currency. The currency board does not control the domestic supply of money, but rather ensures that the supply of domestic currency is limited by the amount of foreign currency or gold held in reserve. The board also commits to continuing to redeem the issued currency at the prevailing market rate.

A Currency Board Is an Entity That