Currency manipulation occurs when a country's government or central bank artificially keeps its currency's value low to give its exports a competitive advantage in international trade.
Common tactics include foreign exchange market intervention (buying foreign currencies to depress the local currency), lowering interest rates (reducing foreign investment demand for the currency), and capital controls.
The primary goal is to boost exports and maintain a trade surplus for economic growth.
Negative effects include international trade imbalances, resource misallocation, and international criticism — countries accused of manipulation may face trade sanctions or retaliatory measures.