The balance of payments deficit will lead to the decrease of foreign exchange supply and the increase of domestic foreign exchange market demand, which will increase the foreign exchange rate and decrease the local currency exchange rate. If the government takes measures to intervene, that is, selling foreign currency and buying local currency, the government must have sufficient foreign exchange reserves, which will further lead to the depreciation of the local currency. Government intervention will directly lead to the reduction of domestic money supply, and the reduction of money supply will lead to the increase of domestic interest rates, leading to economic decline and increased unemployment.

Judging from the causes of the balance of payments deficit, if the balance of payments deficit is caused by the current account deficit, it will inevitably lead to the reduction of employment opportunities in export-related departments and the economic downturn. If the balance of payments deficit is caused by the capital account deficit, it means a large number of capital outflows, tight domestic capital supply, pushing up interest rates, leading to increased unemployment and economic downturn.