A financial institution of a country that sells and buys foreign
currency in order to maintain the exchange rates of a country’s
currency is
a) a commercial bank
b) a private bank
c) a National Bank or a Central Bank
d) a development bank
Right Answer: ( C)
Central of country is responsible for maintaining exchange rate. Exchange rate is determined through the demand and supply for foreign exchange. If there are fluctuations in exchange rates, central bank tends to release or buy foreign exchanges in foreign exchange market. it helps to stabilize value of currency.
A financial institution of a country that sells and buys foreign currency in order to maintain...