When a Central Bank uses an interest rate intervention to

prevent currency weakness, what action do they take and

what is the risk?

The Central Bank will raise short$-$term interest rates, with the risk that this

will weaken the economy.

The Central Bank will lower short$-$term interest rates, with the risk that this

will strengthen the economy.

The Central Bank will lower short$-$term interest rates, with the risk that this

will weaken the economy.