what makes a country's currency stable or weak?

Answer 1

To my limited understanding, a currency is basically a cheque written by the government guaranteeing it's value thru the backing of the national treasury. In the old days, most country followed the gold standard, meaning the total amount of currency printed by the treasury is equivalent to the total amount of gold reserve deposited in the world bank. That was how countries can trade with one another without worrying that the currency which was basically a cheque issued from one country to another, would bounce. But since post WW1, more and more countries have abandoned the gold standard and basically just trade in dollars, and most recently in Euros, because the U.S. and European currencies has been acknowledged among traders as a reliable world market currency. So today, the amount of a country's dollar or Euro reserve affects the stability of a country's currency. Dollars or Euros enter the country either thru trade, foreign investments or overseas remittances from citizens working or living abroad. Hence theoretically, the higher the dollar reserve, the higher the country's buying power in the world market. When a country prints more currency than the actual dollar or Euro reserve available, that leads to inflation and other countries become wary of trading with you, since inflation is basically a government writting a bad cheque.

Answer 2

Inflation.