Intervention in the foreign exchange market may be a way for a country to avoid the macroeconomic consequences of an overvalued exchange rate.

Question

Quizplus · Accepted Answer

Intervention in the foreign exchange market allows a country to buy or sell its own currency to influence its value, which can help correct an overvalued exchange rate and mitigate potential negative macroeconomic consequences such as reduced export competitiveness.

Intervention in the Foreign Exchange Market May Be a Way