During the currency crisis of September 1992, the Bank of England borrowed DM 33 billion from the

Question:

During the currency crisis of September 1992, the Bank of England borrowed DM 33 billion from the Bundesbank when a pound was worth DM 2.78, or $1.912. It sold these DM in the foreign exchange market for pounds in a futile attempt to prevent a devaluation of the pound. It repaid these DM at the postcrisis rate of DM 2.50:£1. By then, the dollar: pound exchange rate was $1.782:£1.

a. By what percentage had the pound sterling devalued in the interim against the Deutsche mark? Against the dollar?

b. What was the cost of intervention to the Bank of England in pounds? In dollars?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars... Foreign Exchange Market
The foreign exchange market (also known as forex, FX or the currency market) is an over-the-counter (OTC) global marketplace that determines the exchange rate for currencies around the world. Participants are able to buy, sell, exchange and...