How might a government intervene in a flexible exchange rate system to stabilize its currency?

In a flexible exchange rate system, the value of a country's currency can change based on supply and demand in the foreign exchange market. To stabilize its currency, a government might intervene by using monetary policy, such as changing interest rates. For example, if a country's currency is rapidly losing value, the government could raise interest rates to attract foreign investment, which increases demand for its currency. Additionally, the government could directly buy or sell its currency in the market to influence its value. These actions can help stabilize the currency and prevent extreme fluctuations that could harm the economy.