10. In a fixed-exchange-rate system, nominal exchange rates are officially determined. If the officially determined exchange rate is greater than the fundamental value of the exchange rate as determined by supply and demand in the foreign exchange market, the exchange rate is said to be overvalued. The central bank can maintain the exchange rate at an overvalued level for a time by using official reserves (such as gold or foreign-currency bank deposits) to buy its own currency in the foreign exchange market. A country that tries to maintain an overvalued exchange rate for too long will run out of reserves and be forced to devalue its currency. If financial investors expect a devaluation, they may sell large quantities of domestic assets (a speculative run). A speculative run increases the supply of the domestic currency in the foreign exchange market and increases the rate at