Question

Comment in favour of Fixed Exchange Rate.

Answer 1

Advantages of Fixed Exchange Rate

Explanation:

• Giving more prominent assurance to importers and exporters, along these lines empowering increasingly global exchange and venture.  

• Helping the Government keep up low inflation, which can have positive long haul impacts, for example, holding down financing costs.
• Maintain a strategic distance from currency fluctuations. In the event that the estimation of currency fluctuates, essentially this can mess up firms engaged in trade.

Answer 2

Fixed rates provide greater certainty for exporters and importers.

Explanation:

A fixed exchange rate system is the system of the exchange rate under which the exchange rate is held constant by the monetary authority of the country. That is, under a fixed exchange rate system the monetary authority of a country fixes the value of its currency against other foreign currencies.