1. Foreign currency intervention is the active management, manipulation, or intervention in the markets valuation of a countrys currency. Who intervenes in the foreign exchange markets? Why is there a need for intervention? How does currency intervention take place? Would you expect it to be effective for an emerging country with limited foreign currency reserves? Please give examples as well.

2. Why would a country prefer its own currency to be strong? Isnt it better to have a weaker, depreciated currency? How would you relate the strong currency to the current account and the balance of payments? Please discuss.