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Criticism from the viewpoint of the proponents of the flexible exchange rate regime.

Economic agents can hedge exchange risk through forward contracts and other methods. They don’t comprise to bear it if they choose not to. Additionally, under a fixed exchange rate regime, governments frequently restrict international trade in order to keep the exchange rate. This is a self-defeating measure. What’s good about the fixed exchange rate if international trade require being restricted?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M9544381

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