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Risk of default premium :arrow_up: - Coggle Diagram
Risk of default premium :arrow_up:
Investors need more compensation for holding UK bonds
Meaning UK bonds less attractive
Sell UK bonds
Sell GBP
Buy foreign currency
Buy foreign bonds
BoE intervenes
Buys up GBP
Sells foreign currency
Foreign reserves decrease
Supply of GBP decreases (M:arrow_down: )
i :arrow_up:
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