1. Home > >

Foreign exchange reserve position and foreign debt level


    cashbackforexbtc East forex cashback reserve position forexcashbackcalculator an important factor Eastforexcashback the basic analysis of foreign exchange transactions, cashback forex its important function is to maintain the stability of the foreign exchange market a countrys currency stability or not, to a large extent depends on the specific market conditions of its foreign exchange reserves can guarantee the foreign exchange liquidity from international experience, even if a countrys currency meets all the theoretical set of exchange rate From international experience, even if a countrys currency meets all the theoretical conditions for exchange rate stability, if the currency suffers from speculative forces and cannot meet the sudden expansion of foreign exchange flows in the foreign exchange market in the short term, the currency has to depreciate. This force is driven by the governments efforts to maintain the exchange rate actually well before the reserves are reduced to zero has been forced to give up    the structure and level of foreign debt is also one of the important factors in the basic analysis of foreign exchange transactions If a country has external liabilities, it is bound to affect the foreign exchange market; if the foreign debt is mismanaged, the resilience of its foreign exchange reserves will be weakened, and the stability of the currency will bring Many countries, such as Argentina and Brazil, have external debt in excess of their reserves, with the initial idea that external debt will remain liquid but, under certain market conditions, if the country fails in its efforts to raise large-scale financing through international markets and loses its original financing channels (which is exactly what happened in the Southeast Asian currency crisis and the Argentine financial crisis), it can only meet liquidity by using foreign exchange reserves to maintain market confidence,: the ability of foreign exchange reserves to stabilize will be challenged from international experience, in the external debt mismanagement leads to exchange rate fluctuations, the exchange rate of the affected currency is often undervalued undervalued degree depends mainly on the stability of the economic system and social order and if a countrys short-term foreign debt is predominant, that will directly impact foreign exchange reserves and if there is an IMF rescue, the currency depreciates sharply in addition to withstand additional adjustment burden in addition to the commercial terms of the IMF loan