Governments play a major role when it comes to exchange rate policy. Using your study materials provided in this module and information in the article U.S. Foreign Exchange Intervention, answer the following questions.
- Examine US government financial policies and what impact those have on exchange rates.
- Select a different country and examine what policies the central banks enacted that have impacted exchange rates. (Example: China and currency control)
- What effects did these exchange policies have on MNEs operating in the country you have selected?
In your responses to your peers, compare and contrast different central bank policies around the world and how different companies have dealt with exchange rate risk.
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