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To: Maurice Winn who wrote (21606)8/25/2007 11:18:52 PM
From: Moominoid  Respond to of 220243
 
In the end net capital and income flows and the opposite net trade balances affect exchange rates (to some degree) in a free floating exchange rate regime. You are going one step back and explaining one of the factors that might drive those flows. But the bottom line is that these flows aren't "money" leaving or entering a country and affecting "liquidity". with one big caveat and that is when the Central Bank intervenes in the currency market.... hmmm I think we might have had that argument before?