Question:

How do countries build up their foreign reserves?

by  |  earlier

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Since countries charge tax on their local currency, I fail to see how they can acquire foregin reserves. Do they do it by exchanging local currency for foreign currency in open market or they do it with other way?

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2 ANSWERS


  1. i dont know


  2. Countries build foreign reserves by exporting more than they import.  No mystery about it.  Internal tax matters do not enter into that equation.

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