How does the value of a
Panamánian balboa compare to that of a U.S. dollar, and why is this so? Write your answer in English.
(4 points)…
1 answer
The Panamanian balboa is pegged to the U.S. dollar at a fixed exchange rate of 1:1. This means that one Panamanian balboa is equivalent in value to one U.S. dollar. This arrangement is in place because Panama does not have its own currency and instead uses the U.S. dollar as its official currency. As a result, the value of one Panamanian balboa will always be the same as one U.S. dollar. This fixed exchange rate provides stability and makes it easier for businesses and consumers to conduct transactions in both currencies without having to worry about fluctuations in exchange rates.
1 answer