More fundamentally, changes in fiscal policy can be deployed to affect the real exchange rate over a longer period: by tightening fiscal policy and increasing national saving, the government can expect to generate a real depreciation and increase net exports.
There is also the option of foreign exchange market intervention, which can be seen as introducing an extra policy instrument to deal with an extra target of policy. 9 Some countries, such as the United States, Chile, and Israel and more recently Japan – as well as the ECB – do not intervene in the exchange markets, or intervene very rarely.