Yes, it's an exhaust fan. If you disassemble the case it will become clearer, but along both plastic panels on each side of the tower and underneath the machine there are air intake holes. So basically it ventilates the entire case from the bottom, through the big 120mm fan, and out the case at the back where there are grill holes for the 120mm fan. This might be counter-intuitive, as you suggest, as this fan is bigger than the CPU fan. However, as long as the exhaust fan pressure and flow is greater than the CPU fan, it won't be a problem at all. If anything, it will make it easier for the CPU fan to do it's job as there will be a slight internal pressure vacuum. This is far better than there being a higher pressure inside the case that the CPU fan has to work hard to push against. Make sense?
This fan doesn't move a lot of air unless the interior of the case gets really warm. It has a built-in thermistor that controls the voltage to the fan. If you room ambient temperature or the internal cards and drives make a lot of heat, it will automatically spin faster and get noisier. I have a small office room and even in the winter when I have several of my machines running at once, the room temperature can climb to 25degC. Then, the exhaust fan on my Quicksilver noticeably spins faster and gets louder.
The power supply fan is also an exhaust fan. You can feel it with your hand.
To prove this, you can take some of those small post it notes used for bookmarking pages and stick them to the power supply and grills at the back of the case. Then you can see the airflow visually and verify that it's working.