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Fixed Exchange Rates
Beginning of paper
In a regime of , how might a Central Bank operate its
monetary policy and its policy for intervention in foreign exchange
markets? Why does it need foreign exchange reserves?
The last 20 years have seen an increased international interdependence due
to the reduction in the controls on capital flows between countries have
been much redu .... Middle of paper
.... government acting through the central bank, agrees
to buy or sell as much of the currency people wish to trade at the fixed
exchange rate. Most central banks act as the government's banker, the
Banks' bank, lender of last resort and issuer of notes as well as
supervising the banking system and operating monetary policy. Monetary
policy refers to the attempts to manipulate the interest rate and the money
supply so as to bring about desir ....
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Number of words: 1526
Number of pages: 6 (approx. 250 words per double-spaced page)
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