Do central banks get involved in geopolitics?
Right now there is a riff between the EU and the US over the price of barrel and the whole “Europe doesn’t contribute to its defense and has to rely on the US for protection”.
What if the European powers decide to become less dependent on the US through creating markets for its products elsewhere? Like say…in Nigeria for example?
Can the EU central bank purchase the currency of Nigeria? Thereby increasing the value of the Nigerian currency and therefore Nigerian spending power and in the process devalue its currency to make its products cheaper? In that situation, wouldn’t it be able to export its products to said country (in this case Nigeria) and be able to grow economically while being less dependent on the United States?
If that is the case, can the EU central bank actually engage in a practice like this to advance geopolitical agenda? Or is it strictly limited to domestic inflation management?