If a country's currency is a reserve currency, then intervention in the foreign exchange market to maintain a pegged exchange rate is unnecessary.

Question

Quizplus · Accepted Answer

Even if a country's currency is a reserve currency, intervention in the foreign exchange market may still be necessary to maintain a pegged exchange rate. Other factors, such as changes in global economic conditions or shifts in demand for the currency, can still affect the exchange rate and require intervention.

If a Country's Currency Is a Reserve Currency, Then Intervention