Economics Exchange Rates Questions
Currency manipulation refers to the deliberate actions taken by a country's government or central bank to artificially influence the value of its currency in the foreign exchange market. This manipulation can be done through various means, such as buying or selling large amounts of the currency, implementing capital controls, or adjusting interest rates. The objective of currency manipulation is typically to gain a competitive advantage in international trade by making exports cheaper and imports more expensive. However, currency manipulation can also have negative consequences, such as distorting global trade flows, creating trade imbalances, and potentially leading to currency wars between countries.