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"The exchange rate used for FBAR reporting is the year-end spot rate."

To strengthen the exchange rate, the central bank simply raises its policy interest rate. As investors in search of higher returns increase their demand for the currency, the exchange rate appreciates. By lowering interest rates, the central bank can weaken the exchange rate.

The Internal Revenue Service has no official exchange rate. Generally, it accepts any posted exchange rate that is used consistently. When valuing currency of a foreign country that uses multiple exchange rates, use the rate that applies to your specific facts and circumstances.

What Is a Currency Peg? A currency peg is a policy in which a national government or central bank sets a fixed exchange rate for its currency with a foreign currency or a basket of currencies and stabilizes the exchange rate between countries. The currency exchange rate is the value of a currency compared to another.

A currency peg is defined as the policy whereby the government or the central bank maintains a fixed exchange rate to the currency belonging to another country, resulting in a stable exchange rate policy between the two. For example, the currency of China was pegged with US dollars until 2015.

Exchange rates for floating currencies are based on the supply and demand of one currency versus another. The exchange rates between two currencies shift as the supply and demand for each change.

Therefore, to stabilize exchange rates, the Fed- eral Reserve would ease monetary policy when the dollar is rising, and tighten when the dollar is falling.

In a floating regime, exchange rates are generally determined by the market forces of supply and demand for foreign exchange. For many years, floating exchange rates have been the regime used by the world's major currencies ? that is, the US dollar, the euro area's euro, the Japanese yen and the UK pound sterling.

The Treasury Reporting Rates of Exchange dataset provides the U.S. government's authoritative exchange rates to ensure consistency for foreign currency units and U.S. dollar equivalents across all reporting done by agencies of the government.

If a currency's value starts to weaken in the global market, that country's central bank can step in and try to influence the exchange rate by creating demand for the currency. The bank can buy its own currency by using foreign currency that it has in its own reserves.