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A country may gain an advantage in international trade if it controls the market for its currency to keep its value low, typically by the national central bank engaging in open market operations. The People’s Republic of China has been acting this way over a long period of time.
Other nations, including Iceland, Japan, Brazil, and so on also devalue their currencies in the hopes of reducing the cost of exports and thus bolstering their economies. A lower exchange rate lowers the price of a country’s goods for consumers in other countries, but raises the price of imported goods and services, for consumers in the low value currency country.

In general, a country that exported goods and services will prefer a lower value on their currencies, while a country that imported goods and services will prefer a higher value on their currencies.

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