Respuesta :
Allowing the foreign exchange market to determine the exchange rate; allowing the market to set the value of the exchange rate most of the time, are some of the ways through which a country can alleviate the impacts of having a merged or hard pegged currency.
What is an Exchange market?
The forex market (Forex, FX, or currency market) is a global decentralised or over-the-counter (OTC) market for currency trading. This market sets the exchange rates for all currencies. It encompasses all aspects of purchasing, selling, and exchanging currencies at current or fixed prices. It is by far the largest market in the world in terms of trading volume, followed by the credit market. The larger international banks are the primary players in this market.
Because currencies are always traded in pairs, the foreign exchange market determines a currency's relative value by setting the market price of one currency if paid for with another.
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