fixed exchange rates

Discipline: Economics

Fixed eExchange Rates, or Pegged Exchange Rates, occur under an exchange rate regime, under which the goverment pegs the value of the country's currency to another currency, or to a basket of various currencies, or to a precious metal, such as gold. When a currency is pegged to another measure of value, its value rises and falls in accordance with it.

The fixed exchange rate regime is contrasted with the floating exchange rate regime.

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