Investment DictionaryPegged Exchange Rate
Pegged (fixed) exchange rate is a regime of currency which value is related to some other stronger currency or a portfolio of currencies. Many smaller emerging countries have their currencies pegged to USD or to EUR, because their economies are two small to maintain floating exchange rate.
The main disadvantage of pegged exchange rate that country looses flexibility of monetary policy, but it is a strongest tool for control of inflation. | Recommended Topics Investment psychology gains momentum in contemporary business world Balance Sheet Most Popular Articles Investing in Gold (I) Investing in Gold (II) Investing in Uncertain Period
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