1. Many developed economies operate within a floating exchange-rate regime. Where a country has a floating exchange rate, identify and discuss the circumstances in which the central bank of that country might conduct transactions in the FX market.
2. The Reserve Bank of Australia sometimes intervenes in the FX markets. Discuss the importance of the RBA trading under its own name during these periods. What is the rationale for the RBA targeting its interventions in the AUD/USD exchange market.