intervention

(banking/foreign exchange) Efforts by central banks and national governments to influence the exchange rates for its currency. Intervention is usually done in one of two ways: (1) The purchase of large amounts of a currency in order to bolster the price, or (2) The sale of large amounts of a currency to lower the price of the currency. Central banks can also raise interest rates in order to attract capital into the country or lower interest rates to discourage the flow of capital into the country.

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