Under a fixed exchange rate regime, losses of international reserves imply that:

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Under a fixed exchange rate regime, the central bank is committed to maintaining the value of the domestic currency at a fixed level against a foreign currency. If the demand and supply of the domestic currency are not balanced, the central bank has to intervene to maintain the exchange rate, either by buying or selling its reserves of foreign currencies. If the central bank is losing its reserves of foreign currencies, it implies that there is a greater demand for the domestic currency than the available supply. Therefore, the pressure on the country to devalue its currency increases to reduce the demand and maintain the exchange rate.

Under a Fixed Exchange Rate Regime, Losses of International Reserves