Currency Crisis - 3 quick answers please.

Can someone pleae explain the following in more detail. Struggling to grasp it.

In the period leading up to a currency crisis the following will happen:

  1. FX reserves Decrease

  2. Broad money growth in nominal and real terms will increase

  3. Real exchange rate will be substantially higher than its mean level during tranquil periods

I am a little unclear on all 3, especially 2 & 3. Why would money growth increase during the lead up to a crisis?

  1. I believe money growth is synonymous with excessive money printing?

  2. Higher exchange rate = depreciating currency?

It all sounds familiar yet mysterious at the same time.

Not sure but I would choose

  1. I believe that “hot money” rapidly increased before crisis. Speculative money caused by bubbles on financial and real estates market.

1 is not because the trend ahead crisis should be opposite, FX reserves have been rapidly increased

@ Flashback, leading up to a currency crisis, FX reserves decrease not increase.

Economics is all a bit fuzzy. I’ll take a couple points on Triangular Arb and Mundell Flemming and move on… lol

Sounds a lot like China right now