Sovereign names refer to central banks active in the spot market. Sovereign can also be used to label financial instruments like bonds, debt, credit default swaps and more that involve a country’s central bank. Sovereign names may also be referred to as government, public and national and should not be confused for a separate type of security.
How do central banks control the market?
Central banks control the markets by adjusting the supply of money through a process known as open market operations and adjusting bank interest rates to control credit. Central banks control these operations to stabilise currencies, reduce unemployment, and prevent inflation.