Authorities to prevent its currency from falling in value

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In the late 1990s Thailand found that its currency, the Baht was overvalued. That is, its fundamental market value was being pushed below its stated par value. What foreign exchange intervention was required by the Thai monetary authorities to prevent its currency from falling in value? Explain the effects of this policy on the value of the Baht. Also summarize the likely effects on the Thai economy. (Use the graphical model of the short run behavior of exchange rates to show the effects of this intervention.) Why was this effort eventually unsuccessful inducing the Thai government to abandon its fixed exchange rate regime?

Reference no: EM131161158

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