00:01
So the easiest way for me to explain this, i think, or to answer this question in general, is to think about a market for foreign exchange, right? imagine that we have a market for the thai baht and we have a demand curve.
00:16
And the free market equilibrium, right, which we're told exists, is at an exchange rate of 28 baht per dollar.
00:24
Now, the goal here is to reduce it, right? we are going from 28 to 30 baht per dollar.
00:36
What does that mean? it means that the baht is weakening because the one us dollar is buying more baht.
00:46
So as weird as it looks, i'm going to put 30 down here because it implies that the baht is actually getting weaker, right? less valuable because one us dollar is buying more baht, or equivalently one baht buys fewer us dollars.
01:04
So we need to weaken it by supplying more, right? if we shift out the supply curve, we can reduce the value of the baht...