currency manipulation is monetary policy intervention within the Forex market. It occurs when a government or central bank buys or sells its own currency on the market with the aim of influencing exchange rates up or down.
Monetary policy makers may intervene in Forex via currency manipulation for a variety of reasons:
- control inflation
- defend competitiveness
- maintain financial stability.
The specific objective of currency manipulation depends on the economic development of the country that performs it, on the context present on the markets and on the international integration of the domestic market with foreign countries.
