Foreign Exhange Market Intervention

A central bank belives the domestic currency to be too highly valued compared to other currencies. One of the consequences is that imports are too cheap resulting in the public buying way too much foreign made stuff.

To counter this, it would be logical for the central bank to:

A) Buy foreign currency in large volumes within a short time span, leading to import prices going up.

B) Sell foreign currency in large volumes within a short time span, leading to import prices going up.

C) Sell foreign currency in large volumes within a short time span, leading to import prices going down.

D) Buy foreign currency in large volumes within a short time span, leading to import prices going down

E) None of the answers are correct.