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A country has a current account balance of -$30bn and a capital and financial account balance (excluding official transactiosn by the central bank) of +$40bn.

A country has a current account balance of -$30bn and a capital and financial account balance (excluding official transactiosn by the central bank) of +$40bn. Assuming there are no errors and omissions in the balance of payments accounts, the central bank of this country must have

1.purchased $10bn worth of its own currency on the foreign excange market, and made additional to foreign currency reserves.

2.used $10bn of foreign exchange reserves to make sales of its own currency on the foreign excahnge market.

3.used $10bn of foreign exchange reserves to make purchases of its own currency on the foreign excahnge market.

4.sold $10bn worth of its own currency on the foreign excange market, and made additional to foreign currency reserves.

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