Country basket is a selection of countries, similar in some conditions, that are analyzed together in order to make the analysis easier. The examples of such basket are:
- G7 group of most developed countries,
- Central and eastern Europe countries (Poland, Czech Republic, Slovakia, Hungary, etc.)
- Asian developing countries
- Central african countries
Country basket makes decisions easier and helps worldwide companies to make decisions on whole baskets, not each country. For example, in case of lower stability of one country in the basket, the financial corporation can withdraw funds not only from that country, but from all countries in the basket.
Such a simplification is cheaper and easier to manage, however it can backfire, as withdrawal or investment in whole basket can lead to losses (exit from profitable market).
- Williamson, J. (1996, November). The case for a common basket peg for East Asian currencies. In a conference on Exchange Rate Policies in Emerging Asian Countries: Domestic and International Aspects. Association for the Monetary Union of Europe and the Korea Institute of Finance.
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