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*Inflation rates* are another important factor. High inflation in the Eurozone, for example, can weaken the Euro, while high inflation in Indonesia can weaken the Rupiah. Central banks often combat inflation by adjusting interest rates. Higher interest rates can attract foreign investment and strengthen a currency. Conversely, lower rates may have the opposite effect. Interest rate changes can cause large fluctuations in the currency market, making it essential to keep up with the latest information from central banks, like the European Central Bank (ECB) or Bank Indonesia (BI). They heavily impact the value of currencies.
