Market stabilization

Market stabilization refers to efforts to reduce extreme fluctuations in financial markets, such as sudden price swings or crashes. When markets become volatile, authorities like central banks or government agencies may intervene—through measures like adjusting interest rates, buying or selling assets, or providing reassurance—to help restore confidence and balance supply and demand. The goal is to create a more stable environment where prices reflect true economic value, encouraging long-term investment and economic growth. Stabilization helps prevent panic, reduces uncertainty, and promotes orderly market functioning.