Examlex
The Fed's indirect method of intervention is to trade dollars for or against other currencies.
Depreciates
The process by which an asset loses value over time, often due to wear and tear or market conditions.
Foreign Exchange Market
A global marketplace for exchanging national currencies against one another.
Trade Deficit
A situation where a country's imports exceed its exports, resulting in a negative balance of trade.
Managed-Floating System
A foreign exchange policy whereby a country's central bank intervenes to control its currency value within certain limits, while still allowing the currency value to fluctuate in response to market forces.
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