Currency Mechanic

To establish currency we have to establish a central bank. The role of the central bank is to store your and foreign currency and trade currencies.

The central bank will have a repo rate that we can fix and the repo rate is a loan taken by public bank from the central bank.

The repo rate can be adjusted to control inflation or deflation. If the repo rate increases it decreases money from the city decrease and the repo rate decreases it increases money income from the city. The effect is proportional to the population of civ.

Inflation of currency

If there is a shortage of our currency in the central bank, the currency can be printed or if any foreign civ invests in our currency or if we sell foreign currency. The extra inflation can be by traders approaching your civ.

Deflation Currency

If we buy foreign currency from our currency and if other civ buy our currency heavily cause deflation.

If inflation or deflation will be high cause heavy trade fluctuation.

One currency will be most used in international trade.

It can be a strategic tool and can cause heavy losses to civ by fluctuating prices by selling or buying currency.

At the beginning of this mechanic currency, the value can be as follow

Civ A

starting A=B=C=D (ABCD are currencies)

After a few turns

A>B

A<C

A>D

Civ B

starting A=B=C=D

B>A

B=C

B<D

If you see any problem please comment.

Before 1972, currencies are ultimately connected to gold or silver, which central banks cannot print.

Repo is also wierd, who is borrowing from your central bank? Commercial banks? You have to introduce them first to have repo then, do you have a plan? For your whole idea of using repo rate as a tool for setting short term interest rate to work, there needs borrowing. Interest rate means nothing without borrowing activities.

The inflation and deflation you use seems to be apreciation and depreciation, rather than inflation and deflation, you need to make your terms clearer.

SunshineWings wrote:

Before 1972, currencies are ultimately connected to gold or silver, which central banks cannot print.

Repo is also wierd, who is borrowing from your central bank? Commercial banks? You have to introduce them first to have repo then, do you have a plan? For your whole idea of using repo rate as a tool for setting short term interest rate to work, there needs borrowing. Interest rate means nothing without borrowing activities.

The inflation and deflation you use seems to be apreciation and depreciation, rather than inflation and deflation, you need to make your terms clearer.

It can be done to give value to currency the gold can be first to determine the value of currency and then value will be bye exchanges of currency.

I choose repo rate because it is better way of showing movement of money from central bank to public bank.

If there is any other way please share.

My major thing is i am trying to show flow of cash and i also said trade is also bringing foreign currency which is exchanged and an income of another currency or an investment by other civ