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On 5 October 2010
On 5 October 2010
On 5 October 2010
benchmark interest rates to zero to 0.1 per cent. It also plans to set up a fund worth $60
billion, or five trillion yen, to buy bonds and commercial paper from the market. The idea
behind this massive supply of money from the central bank is to resist the appreciation of
the yen against other currencies, primarily the US dollar. Unfortunately, Japan is not the
only one intervening in the currency market. According to reports, many other countries,
too, are rigging the values of their currencies.
a) Why developed countries are trying to debase value of their currencies?
b) What are the effects on Indian financial system and intervention of RBI
c) Define ?International Currency War?