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The effect of BOP on currency is such that when a country has a surplus, i.e., its exports exceed imports, this increases the demand for
The effect of BOP on currency is such that when a country has a surplus, i.e., its exports exceed imports, this increases the demand for the country's currency, which increases its value. There is an increase in the currency's value because the currency needs to be purchased internationally to purchase exports of the home country, and the export country's currency rises in price
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