3 Examples on exchange rates under pressure:


The given chart shows the exchange rate behaviour of the three countries currently facing currency crisis.

Accordingly, Sri Lanka has been implementing import controls since July 2021 in the face of the heightened BoP crisis. It also refuses to seek the support of   IMF. This put undue pressure on the exchange rate and caved in panic without proper package preparation.

Central Bank of Egypt (CBE) has immediately acted when pressured with a small devaluation and package support .As a result; they are now able to pursue a somewhat managed exchange rate policy.

Pakistan is pursuing an exchange rate policy based on market demand and supply force. Therefore, the exchange rate is gradually weakening at the moment.