Why do governments manipulate FOREX rates?
Why do governments manipulate FOREX rates?
Homework Answers
Manipulating FOREX rates affect the currency of the nation.
If the currency weakens, inflation goes up, the real value of savings in the country goes down. This helps improve exports.
If currency strengthens, it is good for investors, the common man can buy more, the government can manage external debt, but it is bad for exports.
So depending upon the situation, the government manipulate FOREX rates.
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