(Answered) Political risk is inherent to investing in developing

Finance

Political Risk is inherent to investing in developing nations and emerging markets. Please read this article from the Central Bank of Peru (Rossini, Quispe and Rodríguez (2011) that discusses a policy called 'sterilization'. It is a monetary policy choice that is interesting given Peru's Exchange Rate Regime choice of Partial Dollarization.

Please explain why this Central Bank decided to intervene in the Forex market then evaluate the results provided in the paper. Please find other examples of intervention by Central Banks and describe the rationale behind their policies. Do these policy choices seem useful or disruptive? Why or why not? How are these actions examples of Political Risk to MNCs?

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