Dow Theory
What is Dow Theory
Charles Dow (1851–1902) is considered one of the most influential figures in the world of technical analysis
The Central Bank is the authority responsible for policies affecting the circulating currency, such as changing the reserve requirements of ordinary banks, borrowing facilities, and short-term interest rates, which is in the interest of the economy in general.
The first central bank was established in the seventeenth century in 1668 AD, and the first institution to launch the central bank was Sweden under the name “Swedish Central Bank.” Napoleon then established several central banks in Europe, then England established a central bank in 1694 AD. The establishment of a central bank in France in the year 1800 AD, then the American Central Bank was established in the twentieth century in the year 1913 AD.
One of the most important tasks of the Central Bank is to provide financial services, as it works to cash its own checks and lend money to its members. It buys and sells large quantities of foreign currencies to influence the supply and demand for money. It also works on regulating exchange rates to control inflation, in addition to producing economic statistical reports to guide decisions. financial policy in the country.
Controlling the financial policies in the country, Central banks set interest rates on loans and bonds and usually raise interest rates to slow growth and avoid inflation or reduce them to stimulate growth and industrial activity in addition to consumer spending in the country. In this way, central banks manage monetary policy to direct the country’s economy.
Managing financial controls during emergencies, central banks work to establish and manage financial controls during periods of severe inflationary pressures and lack of supplies, especially in times of war, where the government in such circumstances imposes measures to limit borrowing for non-essential purposes such as buying consumer goods or homes and central banks manage These measures specify the maximum loan amount and the period during which the funds must be returned.
Influencing economic growth in the country, by controlling the liquidity allocated to the financial system in the country, where this is done through a set of measures, the most important of which is.
Controlling the amount of money that must be available in banks, using open market operations in buying and selling securities from other banks, controlling interest rates for loans and bonds.
What is Dow Theory
Charles Dow (1851–1902) is considered one of the most influential figures in the world of technical analysis
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