Fiscal Deficits Can Influence a Currency’s Long-Term DirectionKeyword: forex738 words
Fiscal deficits rarely produce a simple one-way response in exchange rates. Government borrowing can support economic activity, influence interest rates, alter capital flows, and eventually raise questions about debt sustainability. Which force dominates depends on the size and persistence of the deficit, how it is financed, and the economy’s broader financial position. IMF research has … Read more