Governments use gold reserves to intervene in foreign exchange markets.

Name: Governments use gold reserves to intervene in foreign exchange markets.
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Question

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Governments can use their gold reserves to provide stability to their currency by intervening in the foreign exchange markets. They can sell gold to increase their currency's value or buy gold to decrease its value. However, not all governments have significant gold reserves or choose to use them in this way.

Governments Use Gold Reserves to Intervene in Foreign Exchange Markets