BET e NACo BN UEC Was Beoleaamelnaia GeO p ey eae orR Ty a. Pouca sae nrcec Teco) ee Golds not that easy to find and it's not enough to maintain DSS OUR ECMO RCE OC RNC E | PO Cur Cana UC En GE Utes tiesto sien Terms of Political Trade Stability er et esis steel eet Sepee feilae cle Peo ed Pet mn Pano Pom Lae Cece Sed a er aT ne Perit artery oh ee rie Ce Deetan eres Hype eee eres increasing the supply of that currency. Fee ae ay Rec eocr aera tts ‘The value of a currency is increase by Bra suL eu enor cae decreasing the supply of the currency. SSaaheae enh iNest Beene MPA a aR Peggin Pa Oo GC n CCC PACU CLUR S Oman soc ORCS 9909 ‘your currency decrease its value, eC ctt) Exemple: When you pegged you will have to have a reserve currency (foreign reserves) usually in USD. Let's take That Baht for example, 25THB = USD, the government would want to maintain the value even when USD value had gone up. If the USD value ‘goes up or the THB value gone down, the government will buy thb with USD (from the reserve currency) and put the THB that ‘they bought in the vault. This will decrease the supply of THB so THB will get more scarce and the value of thb will increase eet Cece Problem: Worst case possible, the reserve currency will run out and the government can't pegged anymore so they are force to watch the currency float. Mey ARCO E EMCO OLR cima lto ha Dollarization is 2 situation where a country, either officially or unofficially, uses a different country's currency as legal tender for conducting transactions. People from these are usually more happy to receive $ emcee bid ed Dae) Bien eNprgroratns ~ Cane used by anyone in the economic Se EnGenius kc owen O RT ogee tec Roane aceon instar (Sep iTesE Ue acini (lsat (ees (nciadenntone sy cote tbl ene i ia Answer:There are a lot of factors that affect the differ of the currencies value, but the demand and supply and the Political Stability is the most important factors. SH Satan)