1, which is conducive to the stable development of the economy. Under the fixed exchange rate system, the exchange rate is relatively stable, and the fluctuation range of the exchange rate is maintained spontaneously or artificially, which makes the price determination of import and export, the calculation and control of international trade costs, and the settlement of international creditor's rights and debts more stable, and reduces the risks brought by exchange rate fluctuations.
2. It is conducive to the accounting of costs and profits by economic entities such as international trade, international credit and international investment, so as to avoid the risk of exchange rate fluctuations and promote the development of the world economy.
Disadvantages of fixed exchange rate system
1, the implementation of the actual fixed exchange rate system requires countries to pay a great adjustment price.
2, the implementation of a fixed exchange rate system, when the balance of payments deficit, can not be timely through exchange rate changes from the balance of payments, but often lead to a large number of domestic gold foreign exchange outflows, international reserves greatly reduced.
3, the implementation of a fixed exchange rate system will conduct inflation internationally, because price is always the universal law of commodity exchange. When a country experiences inflation, its currency depreciates internally. However, due to the implementation of a fixed exchange rate system, it is impossible to adjust the exchange rate in time, which will inevitably lead to a large number of exports from other countries to the country due to rising domestic prices, leading to a trade surplus in exporting countries and an increase in the money supply of exporting countries due to the increase in foreign exchange income. On the one hand, the commodity supply of exporting countries decreases, on the other hand, the money supply increases, which is easy to lead to inflation, which is closely related to the fixed exchange rate system.
4. Under the fixed exchange rate system, the legal parity and the upper and lower limits of exchange rate fluctuations are determined, and the exchange rate does not always correctly reflect the actual purchasing power of the two currencies. Maintaining the fixed exchange rate system through intervention will inevitably make the internal value and external value of money out of line, thus affecting the internal and external balance of money.
5, can't play the role of economic leverage to adjust the balance of payments, in order to maintain the fixed exchange rate system will destroy the internal economic balance, cause the turmoil and chaos of the international exchange rate system.