If foreign-exchange traders on one day want to exchange P40 million for dollars, to enforce the peg the Mexican government will need to come up with

Question

Quizplus · Accepted Answer

To enforce a peg, the government needs to provide the equivalent value in the currency it is pegging to, based on the exchange rate. If the exchange rate is P20 = $1, then P40 million would be exchanged for $2 million.

If Foreign-Exchange Traders on One Day Want to Exchange P40