Advantages of Fixed Exchange Rate System


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Advantages of Fixed Exchange Rate System

 

i.    Fixed exchange rate system helps in the promotion of international trade and investment, as it prevents risk and uncertainty in transactions.
ii.    Fixed exchange rate system ensures that major economic disturbances, which will weaken the economic policies of member countries, do not occur.
iii.    Fixed exchange rate system helps to co-ordinate the macro policies of countries in an inter-dependent world economy.
iv.    Fixed exchange rate system facilitates long-range planning.
v.    Fixed exchange rate system prevents speculation.

 


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