There are many ways developing countries finance their external deficits except

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Quizplus · Accepted Answer

Foreign exchange rates are not a way for developing countries to finance their external deficits. Instead, they are an important factor that affects the cost of financing such deficits, as changes in exchange rates can increase or decrease the level of external indebtedness and affect the relative competitiveness of domestic goods and services in the international market. Bank finance, portfolio investment, bond finance, and official lending are all significant sources of external finance for developing countries.

There Are Many Ways Developing Countries Finance Their External Deficits