Proper valuation of a currency is crucial to keep its price in line with the economy's fundamentals and prevent issues like asset bubbles and inflation. When a currency's value is not accurately assessed, it can lead to economic problems like inflows of funds causing asset bubbles and inflation. A currency that is too cheap can attract too much money into an economy, while a currency that is too strong can hinder investment and job creation. Central banks play a key role in adjusting a currency's value, but delays in regulatory action can lead to misalignments. It's important to balance a currency's value to avoid economic instability in the long run.