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Please enlighten me on the part on foreign reserve and financial account (10 marks) 7 L b) Malaysia is an oil producer and its budget

Please enlighten me on the part on foreign reserve and financial account

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(10 marks) 7 L b) Malaysia is an oil producer and its budget is highly dependent on its oil revenues other than on tax revenues. Prices of crude oil in early Oct 2018 were about US$74/barrel and in early Jan 2020 they were just above US$60/barrel. By mid-April 2020, however, they were about US$16/barrel. Analyse the effects of the drastic drop in oil prices on Malaysia's current account, financial account and the overall balance of payments. If Malaysia were to operate under a fixed exchange rate system (with US dollars), discuss how the system operates and explain how a fixed exchange rate will affect its foreign reserves

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