Finance, Forex and Investments

How might a country's Central Bank use monetary policy to stimulate domestic aggregate demand via exchange

How might a country's Central Bank use monetary policy to stimulate domestic aggregate demand via exchange rates?

Public Comments

1. It's not that simple really. But one tool used and I know you have been reading and hearing about this is the cut made on interest rate. Movement in interest rates affects the exchange rate, ergo any increase and decrease may or may not stimulate aggregate demand and one of the effect is exchange rate. On the consideration that exchange rate is floating not pegged.