Question

Topic: Choice of Exchange Rate Regimes for Developing Countries: Better Be Fixed or Floating? Countries: Russia and Kazakhstan

What does the greatest impact towards economic changes in most of countries this year? And what is possible impact? Describe it.

(Please, have in mind that not only pandemics make impact on various

countries economics year 2020.)

Answer 1

FIXED Vs FLOATING EXCHANGE RATE:

Fixed exchange rate is a maintained by the government or central bank of the country. in this regime, there will be a  government intervention to maintain its currency value in relation to a foreign currencies.

Floating exchange rate the market forces determines the exchange rate and there will be no intervention of the government.

In case of russia, it is using the a floating exchange rate regime. which means that the value of ruble againts the foreign currencies is determined by the demand and supply forces of the exchange market. thus a flexible exchange rate helps russia to adjust to changing external conditions, smoothing out the impact of external factors on the economy. and kazakhstan is also haveeing the floating exchange rate regime.

As all of us know the world is faceing a huge cries due to covid-19 in both the health and the economic perspectives.more thhan 18% of the developed countries are afected and 24% of the upper middle income countres and 26% of lower middle income countries have been affected. we can say that this depression in the economy is much more higher than the great depression of 1930's. all the countries are trying hard to over come this depression. and many are in the phase of the recession also.