Elara flipped through her annotated copy— Macroeconomics, 9th Edition, by Olivier Blanchard . Her eyes landed on Chapter 21: Exchange Rate Regimes . She traced a finger over a dog-eared passage: “Under a fixed exchange rate, the central bank must be willing to buy or sell domestic currency for foreign currency at the fixed rate. If investors believe the central bank is running out of reserves, they will attack the currency.”
How future outlooks affect current consumption and financial markets. macroeconomics olivier blanchard 9th edition
“Minister,” Elara said, “raising interest rates to 50% is standard Blanchard. It makes holding our currency attractive and punishes short sellers. It’s on page 489.” ” Elara said