Deliberate actions taken by countries to interfere with exchange rates, often to gain a competitive advantage in trade.
Exchange Rates: Understanding different exchange rates and how they affect currency values is fundamental to understanding currency manipulation.
International Monetary Fund (IMF): IMF is an international organization responsible for regulating the international monetary system, managing global financial stability, and providing loans to member countries.
Balance of Payments: Balance of payments refers to the difference in trade between countries and how it affects a country's currency.
Capital Controls: Capital controls refer to measures taken by governments to restrict the flow of capital in and out of a country.
Trade Policy: Trade policies are regulations that government put in place to govern the import and export of goods and services.
Tariffs: Tariffs are taxes on imported goods that governments use to protect a country's domestic industries.
Currency Wars: Currency wars refer to conflicts between different countries as they try to devalue their currencies to gain a competitive advantage.
Exchange Rate Regimes: Exchange rate regimes refer to the different ways a country can manage its currency.
Forex Market: Forex market is the market where currencies are traded at an agreed-upon price.
Speculation: Speculation refers to the practice of trading currencies based on future price predictions.
Interest Rates: Interest rates are a crucial factor in currency values, and changes in interest rates can impact a currency's value greatly.
Inflation: Inflation refers to the general increase in prices over time and its impact on a country's currency.
Economic Indicators: Economic indicators, such as Gross Domestic Product (GDP), unemployment rates, and consumer price indices, are used to assess the health of a country's economy.
Central Banks: Central banks are tasked with managing a country's monetary system, including controlling the money supply and setting interest rates.
Free Trade Agreements: Free trade agreements between countries have a significant impact on currency values.
Political Factors: Political instability can have a negative impact on a country's currency, while political stability can have a positive effect.
Gold Standard: Gold standard refers to the monetary system of the past when currencies were backed up by gold.
Protectionism: Protectionism refers to government policies designed to protect domestic industries from foreign competition.
Appreciation and Depreciation: Appreciation refers to an increase in a currency's value, while depreciation refers to a decrease in a currency's value.
Foreign Currency Reserves: Foreign currency reserves are the foreign currencies held by a country's central bank to stabilize its currency value.
Currency Devaluation: This is when a country deliberately lowers the value of its currency to increase exports, making them cheaper for foreign buyers.
Currency Appreciation: This is the opposite of currency devaluation, where a country increases the value of its currency to reduce imports and encourage domestic production.
Currency Pegging: This involves fixing a nation's currency to another currency, such as the US dollar, to stabilize its value.
Exchange Rate Intervention: This is when a country's central bank purchases or sells foreign currency in the market to manipulate exchange rates.
Foreign Exchange Market Operations: These are actions taken by central banks or governments to influence the supply and demand of their currency in the foreign exchange market.
Reserve Accumulation: This is when a country purchases foreign currency and holds it in foreign reserves to maintain a stable exchange rate.
Capital Controls: These are measures taken by a government to restrict the inflow or outflow of capital from their country to manipulate exchange rates.
Quantitative Easing: This is a monetary policy tool used by central banks to increase the money supply and boost economic activity, but it can also result in currency depreciation.
Competitive Devaluation: This is when multiple countries engage in currency devaluation to gain a competitive advantage in the global market.
Currency Swaps: This is when two countries exchange their currencies to boost trade and investment between them.
Currency Manipulation through Interest Rates: A country can manipulate its currency value through the manipulation of interest rates that affect capital flow across borders.
Currency Manipulation through Trade Actions: This is when a country uses trade actions such as export subsidies, tariffs, and quotas to influence the value of its currency.