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A peg is not credible when investors fear depreciation in the future, despite official announcements. Why is the home interest rate always higher

A peg is not credible when investors fear depreciation in the future, despite official
announcements. Why is the home interest rate always higher under a noncredible peg
than under a credible peg? Why does that make it more costly to maintain a noncredible
peg than a credible peg? Explain why nothing more than a shift in investor
beliefs can cause a peg to break.

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Question:A peg is not credible when investors fear depreciation in the future, despite
official announcements. Why is the home interest rate always higher under
a noncredible peg than under a...

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