In one country, the current account deficit is at the level of 10 billion dollars. This deficit will increase by $2 bill

[answerhappygod]

In One Country The Current Account Deficit Is At The Level Of 10 Billion Dollars This Deficit Will Increase By 2 Bill 1 (24.78 KiB) Viewed 78 times

In one country, the current account deficit is at the level of 10 billion dollars. This deficit will increase by $2 billion every year in the next five years. This country meets only half of the deficit from its financial account (FDI and other short term portfolio investments) each year. The central bank's foreign currency reserves are $5 billion and will increase by one billion a year in the next five years. If the country applies a fixed exchange regime, what would be your expectation for the country's foreign exchange market the next five years? (7 Marks)