Once capital markets are integrated,it is difficult for a country to maintain a fixed exchange rate.Why?

Question

Quizplus · Accepted Answer

Integrated capital markets allow for the free movement of capital between countries, which means that market forces can easily affect exchange rates. If the market forces are stronger than the government's intervention, the exchange rate may become unstable and difficult to maintain at a fixed rate. This is why many countries with integrated capital markets choose to adopt a floating exchange rate system instead. B and C are not relevant factors in this context.

Once Capital Markets Are Integrated,it Is Difficult for a Country