Currency Manipulation

“”Currency manipulation is the act used by the government and central banks of changing its value against other currencies instead of allowing it freely fluctuate based on market dynamics. Currency manipulators do so by fixing the exchange rate or intentionally increasing or decreasing its value.

This practice is unpopular because it gives its own country a trade advantage and artificially distorts the currency price. In fact, this is considered illegal under US law and international agreements.

This unfair currency practice would lead to an unfair trade advantage because the artificial devaluation of a country’s currency may make its exports relatively cheaper and more attractive, resulting in a global trade imbalance in the long run.