Which of the following is not the advantage of a fixed exchange rate regime?

CA Foundation · Business Economics · PYQS · September 2025
Which of the following is not the advantage of a fixed exchange rate regime?
(A) A. An increase in speculation on exchange rate movements.
(B) B. Enhances international trade and investment.
(C) C. Avoids currency fluctuations and eliminates exchange rate risks.
(D) D. Enhances the credibility of the country's monetary policy.

Suggested Answer and Working Notes:

Correct Answer: Option (A)

A. An increase in speculation on exchange rate movements.

Topics: International Trade

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