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Econ Of Globalization

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Econ of globalization
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Econ of globalization
Foreign "Currency Manipulation
Currency manipulation is a situation where a particular country decides to weaken or
lower its currency's value to boost its trade surpluses. Most of these situations happened during
the outbreak of the covid-19 pandemic, which resulted in significant capital flows out of the
ideally developing economics into highly developed economies such as the US and China
(Qureshi, 2021). One of the common examples of currency manipulation is when the UK pound
weakens to the extent that car exports become significantly less expensive to the buyers in other
offshore countries. This situation affects local entrepreneurs and manufacturers because they will
not be able to effectively price the imported goods or raw materials (Weber & Shaikh, 2021).
Therefore, in order to avoid this, there are various methods that a country can limit being
vulnerable to foreign currency manipulation.
One best approach a country can utilize to avoid being subjected to foreign currency
manipulation is effectively setting the fixed rates through the country's Central bank. By doing
this way, the rates are set against various world's major currencies such as the pound, dollar, or
Euro. Also, to stabilize or maintain its exchange rate, the country would need to buy or sell its
own currency against the currency it has already been fixed (Weber & Shaikh, 2021). Besides,
through ideal policies, the country's central bank can effectively manage foreign currency
reserves which would assist the country in economic turmoil.

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1 Econ of globalization Student's name Institution affiliation Course Date 2 Econ of globalization Foreign "Currency Manipulation Currency manipulation is a situation where a particular country decides to weaken or lower its currency's value to boost its trade surpluses. Most of these situations happened during the outbreak of the covid-19 pandemic, which resulted in significant capital flows out of the ideally developing economics into highly developed economies such as the US and China (Qureshi, 2021). One of the common examples of currency manipulation is when the UK pound weakens to the extent that car exports become significantly less expensive to the buyers in other offshore countries. This situation affects local entrepreneurs and manufacturers because they will not be able to effectively price the imported goods or raw materials (Weber & Shaikh, 2021). Therefore, in order to ...
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