If foreign investors fear that a peg may be broken because of fund outflows from that country, they may attempt to purchase more of that currency before the peg is broken.

Name: If foreign investors fear that a peg may be broken because of fund outflows from that country, they may attempt to purchase more of that currency before the peg is broken.
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Question

Quizplus · Accepted Answer

Foreign investors would likely sell the currency if they fear the peg might break, anticipating a devaluation, rather than purchasing more of it.

If Foreign Investors Fear That a Peg May Be Broken