This term is used by people dealing in currencies. Basically, it is a method which monetary authorities employ to make limit the amount of domestic currency in the foreign exchange. The result of this is that it will equalize the effects of foreign exchange transactions on the domestic monetary base.

This entry was posted on Wednesday, May 28th, 2008 at 2:56 pm and is filed under Investing Basics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.