Some countries have low interest rates and appreciating currencies because they are politically stable. their central banks intervene in the foreign exchange market to support the currency. their inflation rates are low, making the real interest rates high. they have developed financial systems.

Some countries have low interest rates and appreciating currencies because they are politically stable. their central banks intervene in the foreign exchange market to support the currency. their inflation rates are low, making the real interest rates high. they have developed financial systems.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter21: International Cash Management

Section: Chapter Questions

Problem 5ST

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Concept explainers

Balance of Payments

BOP is categorized into the following three components:

Question

Some countries have low interest rates and appreciating currencies because

		they are politically stable.
		their central banks intervene in the foreign exchange market to support the currency.
		their inflation rates are low, making the real interest rates high.
		they have developed financial systems.

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