Question

What is a "pegged" exchange rate system? Do all of these still exist today? If so,...

What is a "pegged" exchange rate system? Do all of these still exist today? If so, what are some examples

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Answer #1

A pegged exchange rate is an exchange system in which a country fixes it currency rate with a single foreign currency or a basket of other currencies The rate is fixed and does not fluctuate because of demand and supply of domestic and foreign currency.

Yes these still exist today. Examples of pegged currencies are Hong Kong Dollar Pegged to US Dollar. Chinese Yen is pegged to US dollar.

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