If a country's exchange rate is pegged above the equilibrium exchange rate, the country must:

Name: If a country's exchange rate is pegged above the equilibrium exchange rate, the country must:
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When a country's exchange rate is pegged above the equilibrium exchange rate, it means the domestic currency is overvalued. To maintain this peg, the country must buy its own currency in the foreign exchange market, thereby increasing demand for the currency to support its value at the pegged rate.

If a Country's Exchange Rate Is Pegged Above the Equilibrium