In the 21st century, economic competition among nations has moved beyond traditional trade barriers and tariffs into more subtle and strategic forms. One of the most powerful yet less overt tools in this competition is currency policy. This article explores how states manipulate exchange rates, interest rates, and capital flows to gain economic advantages on the global stage. Termed as "soft weapons," these tools can yield "hard impacts" by altering trade balances, influencing investment flows, and reshaping global financial stability. Drawing on both historical examples and contemporary case studies—including the U.S.–China trade dynamics, the Eurozone’s monetary integration, and emerging markets’ devaluation strategies—this study evaluates the effectiveness, risks, and ethical dimensions of currency-driven economic policy. Furthermore, it examines the roles of international institutions such as the IMF and WTO in mediating disputes and maintaining monetary order. The findings contribute to a deeper understanding of financial geopolitics in an increasingly interconnected world.
T.Y. Masimov (2025) studied this question.