How do world currencies work? What is currency manipulation?

World currencies are the official mediums of exchange used within their respective countries.

Currencies are typically issued and regulated by a central bank and are typically backed by a commodity or fiat money.

Currency exchange rates are determined by the supply and demand of a particular currency in relation to other currencies.

Currency manipulation is when a country deliberately intervenes in the foreign exchange market to achieve a desired exchange rate.

Examples of currency manipulation include devaluing a currency to make exports more competitive, intervening in the market to artificially raise the value of a currency, or setting a currency peg to another currency.

Currency manipulation can have severe impacts on economies and can cause large trade imbalances between countries.

International organizations, such as the International Monetary Fund, have attempted to regulate currency manipulation, but governments can still manipulate their currency values if they have the resources to do so.

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