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Suppose your country has a fixed exchange rate regime and is currently facing a Balance of payment crisis.One of the policy options for your Central
Suppose your country has a fixed exchange rate regime and is currently facing a Balance of payment crisis.One of the policy options for your Central Bank in response to this Balance of payment crisis is to conduct devaluation.However, devaluation has its own set of costs.As a policy analyst, you have been asked to provide counter-arguments to this policy.Hence, you are to provide five reasons why the central bank should not conduct devaluation hint: think of the disadvantages. Discuss each disadvantage in a separate paragraph.
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