A currency war, also known as competitive devaluation, is a situation in which countries attempt to gain a trade advantage by devaluing their currency. This can be done through a variety of means, including lowering interest rates, selling off foreign exchange reserves, or engaging in large-scale asset purchases. The main goal of a currency war is to make a country's exports cheaper and more price competitive on the global market, but it can also lead to retaliatory actions by other countries and potentially contribute to global economic instability.