In a managed float regime, the exchange rate is determined by supply and demand forces in the market, but the central bank intervenes when the national currency becomes too weak or strong. Under unsterilized foreign exchange intervention, the central bank influences the exchange rate by adjusting MBs to trigger changes in MSs. The increase in the MS through the purchase of international reserves induces a depreciation of the domestic currency, while the reduction of the MS through the sale of international reserves induces an appreciation of the domestic currency influencing both the domestic nominal interest rate and expectations on the rate of exchange. future change. Central banks also engage in sterilized exchange rate interventions “when they offset the purchase or sale of international reserves with a domestic sale or purchase. For example, the central bank's purchase of $10,000 million of international currency could be sterilized by selling $10,000 million worth of national government bonds. When a sterilized intervention is undertaken, there is no net change in MB, so there is no long-term effect on the exchange rate. Additionally, central banks can choose to participate in large currency interventions in which a country seeks to peg its fixed currency