Why Central Banks Devalue Their Own Currency

Central banks rarely say it out loud, but deliberately weakening the exchange rate is one of their oldest tools. In this episode, Lucas and Luna unpack competitive devaluation — why the Bank of Japan leaned into yen weakness through 2024 and 2025, how the Swiss National Bank capped the franc for years, and what happens when every central bank tries to devalue at once. They walk through the specific mechanics: selling reserves, setting negative rates, and using forward guidance to signal a weaker currency. They also explore the limits — the point where devaluation stops helping exports and starts hurting consumers via higher import prices. A focused look at the strategy central banks use most but talk about least. #CentralBanking #CurrencyDevaluation #CompetitiveDevaluation #BankOfJapan #SwissNationalBank #YenWeakness #FrancCapping #NegativeRates #ForexReserves #ExportStrategy #ImportPrices #MonetaryPolicy #ExchangeRates #YieldCurveControl #CarryTrade #Economics #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo