A worsening current account deficit might discourage investor 's confidence and thus create a lower demand and value of the Bahamian Dollar . A depreciation would increase imported inflation and also foreign debts and services payments , creating a much higher current account deficit as well as a debt-trap-cycle ( a high deficit requires inflow of funds by foreign borrowing or selling its assets to foreigners , which requires return and thus again worsen its current account deficit . A more contractionary monetary policy might...
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