Which of the following is an example of direct intervention in foreign exchange markets

Question

Quizplus · Accepted Answer

Direct intervention in foreign exchange markets refers to the central bank directly buying or selling its own currency to influence exchange rates. Exchanging dollars for foreign currency is an example of direct intervention. Lowering interest rates or imposing barriers on international trade can indirectly affect exchange rates, and increasing the discount rate is a tool for controlling inflation.

Which of the Following Is an Example of Direct Intervention