Inflation and deflation are two economic forces that central banks must constantly monitor and manage. Gold reserves can be instrumental in this regard. During periods of high inflation, central banks can sell gold to i

ject liquidity into the economy, thereby curbing rising prices. Conversely, during deflationary phases, they ca

 

n purchase gold to increase the money supply and stimulate economic activity. This dynamic use of gold reserves helps central banks maintain a steady and healthy inflation rate.