The ability of a government to fix its currency's exchange rate is limited by the size of its reserves.

Name: The ability of a government to fix its currency's exchange rate is limited by the size of its reserves.
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The government can only maintain a fixed exchange rate as long as it has sufficient foreign currency reserves to support its currency's value. Once reserves are depleted, the government may no longer be able to sustain the fixed exchange rate.

The Ability of a Government to Fix Its Currency's Exchange