Disadvantages of fixed exchange rate - Advantages of fixed exchange rates

He has worked more than 13 years in both public and private accounting jobs and more than four years licensed as an insurance producer.

Nonetheless, even when countries commit with credible systems in place, pressures on the system sometimes can lead to collapse.

Who holds the exchange rate fixed and how? Effective management of a fixed-rate system also requires a large pool of reserves to support the currency when it is under pressure.

The disadvantages of a fixed exchange rate include: Preventing adjustments for currencies that become under- or over-valued.