Questions tagged [pegged exchange rate]

Elena Fri Apr 25 2025 | 7 answers 1724

I'm trying to understand pegged exchange rates. Specifically, I want to know if a pegged exchange rate is considered fixed or if it can fluctuate within certain limits. Can someone clarify this for me?

Bianca Mon Jan 13 2025 | 6 answers 1230

I'm trying to understand what a fixed or pegged exchange rate is. I've heard about it in the context of currencies and financial markets, but I'm not entirely sure how it works or what its implications are.

Giulia Tue Nov 19 2024 | 5 answers 1152

I want to understand why a pegged exchange rate is considered unfavorable. What are the negative impacts or consequences associated with it?

Maria Thu Aug 08 2024 | 7 answers 1360

As a curious investor, I am wondering about the potential drawbacks of a pegged exchange rate system. Could you elaborate on some of the weaknesses or challenges that such a system might face? For instance, how does it impact a country's monetary policy flexibility and its ability to respond to economic shocks? Additionally, what are the risks associated with maintaining the peg, and how might a sudden devaluation or revaluation impact market sentiment and investor confidence?

noah_wright_author Thu Aug 08 2024 | 0 answers 0

How does a pegged exchange rate function exactly? Could you elaborate on the mechanisms involved in maintaining such a stable rate between two currencies? Does it rely on government intervention or market forces? What are the benefits and drawbacks of using a pegged exchange rate system? Is it easier to predict and manage fluctuations in exchange rates with a pegged system compared to a floating exchange rate? Lastly, how does a country go about changing its exchange rate regime from floating to pegged, or vice versa?