Readings

Question 1

Two indications of selling pressure

Answer 1

Losses in the foreign reserves

Depreciating ER in the forward market

Question 2

When does a currency crisis end

Answer 2

When selling pressure stops

Question 3

Currency crises that end in devaluations or accelerated dpreciations are sometimes called…

Answer 3

Currency Crashes

Not all crises end in crashes

Question 4

Three ways to end selling pressure

Answer 4

Capital controls
IMF loans
Restore confidence in existing ER

Question 5

Two features that a currency crisis must have

Answer 5

Depreciation must be large compared to recent rates

Nominal ER depreciation must effect the real ER depreciation