But depreciating the exchange rate by intervention is not a completely benign option. It hurts importers who need to spend more. It hurts the government as it has to spend more on subsidizing imports such as oil and fertilizers and also spend more on external debt servicing. Intervention can also fuel inflationary pressures in which case it hurts everyone.
We believe that it is in our collective interest as global citizens if exchange rates are allowed to be determined by market fundamentals. You all probably heard of “currency wars” – a situation where countries indulge in competitive devaluation of their currencies for trade advantage. That can lead to global imbalances of several kinds.