To avoid currency crisis in the face of fully integrated capital markets, a country can have a

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Both a floating exchange rate and a fixed exchange rate can help avoid currency crises in different ways. A floating exchange rate allows the currency to adjust to market forces, which can prevent overvaluation or undervaluation that can lead to a crisis. A fixed exchange rate can provide stability and predictability for international trade and investors, but it must be accompanied by policies that promote competitiveness and prevent unsustainable imbalances. Therefore, a combination of both policies can be a viable option.

To Avoid Currency Crisis in the Face of Fully Integrated