In a fixed exchange rate system,rates are maintained by the central bank's ongoing purchases and sales of currencies.

Question

Quizplus · Accepted Answer

In a fixed exchange rate system, the central bank intervenes in the foreign exchange market by buying or selling currencies to maintain the fixed rate. This is done through various measures, such as adjusting interest rates, imposing capital controls, or using foreign exchange reserves to buy or sell currencies.

In a Fixed Exchange Rate System,rates Are Maintained by the Central