International trade is just trade across national boundaries. But because different countries may have different currencies, trade across national boundaries is often influenced by the exchange rate, which is the price of one currency in terms of another. Just like other prices, exchange rates are determined by the interaction of supply and demand. As with other prices, government intervention can create distortions in exchange rates, which, in turn, impair exchange relations and the smooth functioning of markets. We explain how governments induce needless volatility in exchange rates when they act as “Big Players” by taking arbitrary and unpredictable actions that influence the exchange rate. Such discretionary interventions create uncertainty and volatility. They also violate the legal principle of the rule of law which excludes discretionary government policy and includes the idea that everyone, including governments, should play by the same.