In the face of a balance-of-payments deficit,a country may maintain its exchange rate at a fixed level by

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To maintain its exchange rate at a fixed level in the face of a balance-of-payments deficit, a country can buy its own currency on foreign exchanges. This action increases demand for the currency, helping to support or raise its value, which is a direct intervention to maintain the fixed exchange rate.

In the Face of a Balance-Of-Payments Deficit,a Country May Maintain