The Effect Of Foreign Exchange On Economic Growth

INTRODUCTION 1.1 Background to the StudyThe foreign exchange market intervention phenomenon is obviously not a recent development, quite a number of governments across the globe have intervened in foreign exchange markets. The essence has mostly been to try to dampen volatility and to slow or reverse currency movements. This is usually borne out of concern that excessive short-term volatility and longer-term swings in exchange rates that "overshoot" values justified by fundamental conditions may hurt their economies, especially sectors heavily involved in international trade. And thi…