👉 Currency engineering refers to the strategic manipulation of a currency's supply, demand, and exchange rate dynamics by central banks or governments to achieve specific economic objectives. This practice involves tools such as open market operations, quantitative easing, and forward guidance to influence interest rates, inflation, and economic growth. By altering the money supply or implementing unconventional monetary policies like negative interest rates or large-scale asset purchases, central banks can indirectly control the currency's value and its role in international trade. For instance, expanding the money supply can lead to depreciation of the currency, making exports cheaper and boosting economic activity, while tightening monetary policy can strengthen the currency, curbing inflation but potentially dampening export competitiveness. Thus, currency engineering is a powerful yet complex tool used to steer economies towards desired macroeconomic outcomes.
