Currency manipulation is the technique of changing its value as compared to other currencies. This technique is totally opposite to leave currency free to fluctuate in the market based on forex market trends. Government implements this policy through fixing the currency rate by deliberately increasing or decreasing its value.
This forex market practice is also known as artificial currency distortion practice. This practice is considered as illegal mainly due to international agreements and US based laws. International law prohibits this kind of practice as it creates artificial advantage for the practicing country. Since, it creates global trade imbalance through making exports cheaper and more attractive.