Following a report of additional investing RISK in country A (the domestic currency, FA), the balance of payments re-equilibration occurs in which order Domestic agents increase their supply of the domestic currency (DC) in the FX market to trade (M) The DC depreciates from the financial account (DI or FI) The domestic interest in M increases Domestic agents decrease their interest in imports (M) since the relative price has increased (takes more DC to buy the FC to buy M ) The DC depreciates from the current account The DC appreciates (from the current account) Domestic agents decrease their supply of the domestic currency (DC) in the FX market since they buy fewer imports (M) The relative price (RP) of imports (M) dereases (i.e. it takes less DC to buy the FC to trade in the same amount of M)