Reserve, Rt
external-currency units (F) held at the junction
Exchange rate at the junction, τ/F
1.0 = par; shaded area = price pressure below par
τ money supply
total internal currency in circulation
Local velocity
local spend / τ supply, per period
The exchange rate at the junction is 1 − δt, the break-of-par discount of eq. (6): while the reserve covers demand it stays pinned at 1.0 (par); once demand outruns the usable reserve, τ is rationed and the implied rate falls below par — the model's stand-in for a currency under convertibility stress. With the external-guarantor switch on, the junction never rations: it always clears at par, and the gap is drawn from the guarantor instead (shown in the reserve chart going flat at zero rather than the rate chart moving).