In a fixed exchange rate system,a country whose currency is undervalued will lose international reserves.

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In a fixed exchange rate system, the central bank of the country whose currency is undervalued will have to sell its own currency and buy foreign currency to maintain the fixed exchange rate. This will increase international reserves, not decrease them. However, if the country's reserves are already low, the central bank may run out of foreign currency, leading to a devaluation of the domestic currency.

In a Fixed Exchange Rate System,a Country Whose Currency Is