If the central bank sets an exchange rate that undervalues the foreign currency- and the flows of

Question:

If the central bank sets an exchange rate that undervalues the foreign currency- and the flows of goods and capital adjust simultaneously-what will be the impact on the following:

(a) RFX (increase/decrease)

(b) BOP (surplus/deficit).

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...