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Stable currency fluctuations are a sign of a healthy economy. No country in the world can meet all its needs alone, so it must cooperate and transact with other countries. Meanwhile, export and import activities are highly dependent on a country's exchange rate, even if they mostly use USD, which means they must convert local currency to USD.
A drastic decline in a country's currency exchange rate in the short term only impacts exporters, importers, or large traders. However, if left unchecked over the long term, it can have a significant negative impact on the entire population.
To control currency fluctuations, the central bank employs various monetary policy instruments, such as direct intervention in the foreign exchange market, setting benchmark interest rates, conducting open market operations, and so on. Unfortunately, in many developing countries, central banks often lack sufficient money supply, making them unable to prevent large investors from speculating, which further depresses the currency. Currency speculators can then buy back currency at a lower price, thereby generating substantial profits. such as the case of George Soros which left the Bank of England in a state of confusion.
A drastic decline in a country's currency exchange rate in the short term only impacts exporters, importers, or large traders. However, if left unchecked over the long term, it can have a significant negative impact on the entire population.
To control currency fluctuations, the central bank employs various monetary policy instruments, such as direct intervention in the foreign exchange market, setting benchmark interest rates, conducting open market operations, and so on. Unfortunately, in many developing countries, central banks often lack sufficient money supply, making them unable to prevent large investors from speculating, which further depresses the currency. Currency speculators can then buy back currency at a lower price, thereby generating substantial profits. such as the case of George Soros which left the Bank of England in a state of confusion.
