Fixed exchange rate refers to the exchange rate of local currency and foreign currency set by the central bank in the foreign exchange market. Example: 1 $ = 8 Then in the foreign exchange market, the exchange rate of the US dollar against RMB can only be 1:8 or fluctuate slightly. Then when countries conduct foreign trade, there will naturally be a trade surplus or deficit, which will lead to the pressure of appreciation or depreciation of local currency in the foreign exchange market. At this time, the central bank will stabilize the official fixed exchange rate by buying and selling foreign exchange and domestic currency in the foreign exchange market. The result of fixing the exchange rate is: 1. When domestic interest rate = international exchange rate, foreign hot money will not enter, thus solving external inflation. 2. When the domestic interest rate >; At the time of international exchange rate, foreign hot money enters, which leads to the pressure of domestic currency appreciation. Therefore, the central bank must maintain a fixed exchange rate of the currency and operate in the opposite direction, which requires the country to have sufficient foreign exchange reserves. But generally speaking, the domestic money supply is M=D+R (domestic money supply+foreign money supply), which rises and falls, so at a fixed exchange rate, the domestic money supply is stable, so there will be no supply-oriented inflation, which is what you call government behavioral inflation.

1998 During the Asian financial turmoil, Thailand was a good example. I won't say much here, just look it up. Soros didn't bring down Hong Kong's economy because Hong Kong 1997 just returned to China and was backed by the mainland. This is why before 2005, when China implemented a fixed exchange rate, it always required to export to earn foreign exchange.

Grass, knocked for a long time and found that only 5 points were given. I'm sorry if I didn't adopt it. Ask if you have any questions, and add some points!