foreign currency reserves

• What can governments use to manipulate the value of their currency?

  Gold and foreign currency reserves
• How can a government weaken the value of the pound?

  By increasing supply through buying foreign currency or gold with pounds
• If a government wants to strengthen the pound, what action should they take?

  Increase demand by selling foreign currency or gold in exchange for pounds
• What has central banks found about the long-term impact of using gold and foreign currency reserves to manipulate currency value?

  This method tends to have little impact on currencies in the long term
• What is one way central banks can limit the supply of currency?

  By introducing currency controls
• What is the effect of introducing currency controls on the value of a currency?

  It can fix the value of the currency