Case in point is a developing country who find it's domestic savings insufficient and in turn depends on Foreign portfolio investment to increase it's productivity, wages and drive it's economic growth. But it faces problem when FPIs start to withdraw from it's economy thus decreasing it's exchange rate(ER). So as a policymaker how to arrest that volatility in exchange rate, apart from selling Forex and monetary policy, by inducing more national savings rate.

I am having difficulty in understanding what 'national savings' mean when they write it so in economics textbooks and it's aspects, How to increase it? Please answer,and Thank you in advance.



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