I. Currency war, also known as “competitive devaluation,” is an international situation in which countries compete to obtain a low exchange rate for their currency. Recently, the most prominent conflict has been between China and the United States overvaluing the yuan. The main focus is on China, due to fears that currency manipulation could lead to currency wars, and China's accumulation of more than $3 trillion in foreign exchange reserves has evolved into the idea that it is intentionally undervaluing the renminbi. As a result, the United States and Europe imposed trade sanctions against China as the latter failed to allow its currency to adequately adapt to market forces. When several countries try to devalue their currencies at the same time, and benefit from it, the result could be instability. Therefore, attempting to make gains through currency manipulation can lead to an unstable global market economy. As a result, investment and trade could be discouraged, which would limit growth. Emerging countries, such as China, are in a different growth phase and can afford a fixed increase in their currencies. However, the currency's rise is intimidating due to the possible reduction in global export competitiveness. Ultimately, the currency war will not only be between China and the United States, but between emerging countries and developed countries. The view of various experts is that the idea of ​​a currency war could lead to the “early days of a trade battle” generated by the power of emerging markets (CNBC). Solutions for the future include Chinese leaders participating in a rapid currency readjustment. To avoid undesirably high inflation in China, such… half of the paper… the 2008 crisis, and as a result Latvia was able to record a surplus in the accounts. Growing demand for wood and metal products were exports that fueled Latvia's recovery and signaled there would be no major implications for international trade. The economic relations between the United States and Latvia are quite progressive and offer growing scope. There are service industries such as telecommunications, transportation, and renewable energy technologies that are all areas of possible trade and investment between the United States and Latvia. This case concerns my adopted country, Serbia, because just like Latvia, Serbia also received loans from the IMF. Serbia's agreement with the International Monetary Fund ensured Serbia would receive additional loans from the World Bank, as well as budget support from the European Union. At this time, Serbia is still in the process of qualifying to join the EU.