Central Banks' Currency Value Control Methods Impact Global Trade Stability
The value of a currency can be adjusted through interest rates, bank reserve ratios, or pegging to a basket of currencies. Daily fluctuations in currency exchange rates are influenced by supply and demand, while monetary policy tools are used to support economies. Central banks can adjust currency value by changing interest rates or money supply. Pegging to a basket of currencies helps maintain stable trading conditions but can also expose an economy to external factors.