What is intervention?

Alexander Yulin
Alexander Yulin
August 9, 2012
What is intervention?

Every phenomenon in the world needs a name. Intervention has always existed, only this term is young and it has a lot of meanings. What is intervention? We will tell further in our article.

What is military intervention

Military intervention is the introduction of troops into the territory of another state in order to protect their own geopolitical, economic and territorial interests. History has known many such examples, the most recent ones being the war in Libya, Yugoslavia and Iraq. There may be many reasons (most often it is a lack of democracy), but the goal is always the same - the exploitation of the country's natural resources and infrastructure.

What is economic intervention?

Such intervention is the seizure of the consumer market of a certain state in order to extract super profits. Methods are always traditional: dumping and lobbying for their foreign economic interests in the parliament of a country that has undergone economic intervention. As an example, you can consider Russia of the 90s.

What is currency intervention

When the Central Bank buys or throws into circulation from its own reserves a huge amount of foreign currency, this is called currency intervention. Its goal is to influence the exchange rate in its own economic interests. So, buying a huge amount of rubles (intervention in the domestic foreign exchange market), the CBRF can influence inflation. The logic is simple - the more money supply is in cash turnover compared to the value of goods produced in the country, the less this money is worth. Consequently, and vice versa.

Foreign exchange intervention in foreign markets is carried out within regional economic zones (for example, the CIS), in coordination with partners for economic interests. Otherwise, it would be meaningless, since the role of one state is negligible and cannot produce visible effects.