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It’s easy to put a ceiling on your country’s currency trading range. The Swiss did this. Whenever the franc got too high their central bank would sell however m
by User23 5y ago
It’s easy to put a ceiling on your country’s currency trading range. The Swiss did this. Whenever the franc got too high their central bank would sell however much was necessary to stabilize the price.
- exoque 5y agoAnd they stopped doing that because it wasn't maintainable.
- User23 5y agoOf course it was maintainable. They stopped doing it because the situation in the EZ more or less stabilized. The Swiss central bank can always sell as many Francs as they want at any price that is below current bids and that’s always the case when defending an upside limit. They’re never going to run out of Francs to sell because they can issue without any technical limit.