Question

Intervention in foreign exchange markets involves: central banks prohibiting transactions in one or more currencies. commercial...

Intervention in foreign exchange markets involves:

  • central banks prohibiting transactions in one or more currencies.

  • commercial banks of different countries coordinating their efforts to stabilize exchange rates.

  • All of the options.

  • central banks buying or selling local currency to influence exchange rates.

  • commercial bank trades at government mandated exchange rates.

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Answer: The fourth option is correct
Intervention in foreign exchange markets involves central banks buying or selling local currency to influence the exchange rates.

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