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Complete 6 page APA formatted essay: International monetary.This occurs when it becomes impossible to maintain the deficit in the current account. This situation indicates, in general sense, that ther
Complete 6 page APA formatted essay: International monetary.
This occurs when it becomes impossible to maintain the deficit in the current account. This situation indicates, in general sense, that there will be shortage in the foreign exchange reserves and the particular country is no longer in a position to attract sufficient amount of capital inflows for financing the deficit. For handling this situation of crisis, the government takes measure with the motto of reducing the spending of consumers on imports (Economics Help, 2011). The paper will be presented in a compact manner with the brief explanations about the policies undertaken within the exchange rate regime and alternative approaches and then taking up the interrelationships between the two phenomena along with their critical evaluation. Exchange Rate Regime in Resolving BoP Crisis The approaches under the exchange rate regime are floating, fixed and pegged exchange rate regime.
