5) Because capital flows were an important element in the currency crises, it has been advocated...

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5) Because capital flows were an important element in the currency crises, it has been advocated that emerging markets countries avoid the financial instability by restricting capital mobility. Assess the extent to which you agree with this statement 6) If a country's par exchange rate is overvalued, what kind of intervention would that country's central bank be forced to undertake, and what kind of effect would it have on its international reserves? What must happen if this country's central bank decides not to intervene anymore? 5) Because capital flows were an important element in the currency crises, it has been advocated that emerging markets countries avoid the financial instability by restricting capital mobility. Assess the extent to which you agree with this statement 6) If a country's par exchange rate is overvalued, what kind of intervention would that country's central bank be forced to undertake, and what kind of effect would it have on its international reserves? What must happen if this country's central bank decides not to intervene anymore?

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5 Among fundamental causes of currency crises one can point to the excessive expansion and overborrowing of the public and private sectors and inconsistent and non transparent economic policiesCapital ... View the full answer