Sabtu , 7 Desember 2024

How does capital flight affect exchange rate brainly

Pertanyaan

How does capital flight affect exchange rate?

Jawaban

When a country experiences capital flight, what is the effect on its interest rate and exchange rate? Capital flight is a large and sudden movement of funds out of a country. Capital flight causes the interest rate to increase and the exchange rate to depreciate.

A trade restriction increases net exports for a given exchange rate and, therefore, increases the demand for dollars in the market for foreign-currency exchange. … In particular, political instability can lead to capital flight, which tends to increase interest rates and cause the currency to depreciate.

Tinggalkan Balasan

Alamat email Anda tidak akan dipublikasikan. Ruas yang wajib ditandai *