Chaos In The Currency Markets : Currency Crisis Of The EMS
Beginning of paper
1. What does the crisis of September 1992 tell you about the relative abilities
of currency markets and national governments to influence exchange rates?
The currency markets and national governments both have abilities to
influence exchange rates. Like other financial markets, foreign exchange ma ....
Middle of paper
.... (buying and selling
currencies) in the foreign exchange markets and indirect intervening by
affecting macro variables such as interest rates.
2. What does the crisis of September 1992 tell you about the weakness of fixed
exchange rate regimes?
From European currency crisis of September 1992, it shows us that there
are weakness of the fixed exchange rate system. When exchange rate are tied, a
high interest rate in one country has a strong influence on interest rates in
the other countries. ....
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Word count: 827
Page count: 4 (approximately 250 words per page)
