00:01
So the question is to list pros and cons of different exchange rate regimes.
00:15
So the two main ones are fixed exchange rate and floating.
00:25
So i'm going to talk about the benefits and pros and cons of floating, which is actually reflect also on the fixed one because they are the opposite sign of the same coin.
00:37
So when you have a floating exchange rate system, there is no need.
00:42
To manage them.
00:44
Okay, it's floating, is decided by the market.
00:48
In a fixed system, the government, the central bank has to keep it fixed, right, by buying or selling foreign currencies, for example.
00:58
And so in the fixed system of exchange rate, the central banks has to interfere, okay, and intervene frequently in the floating exchange rate that is not required.
01:14
Also, if you have a fixed exchange rate, you might have to restrict the flow of capital in an order of the country...