Search results
Results from the WOW.Com Content Network
A fixed exchange rate, often called a pegged exchange rate, is a type of exchange rate regime in which a currency's value is fixed or pegged by a monetary authority against the value of another currency, a basket of other currencies, or another measure of value, such as gold.
An exchange rate regime is a way a monetary authority of a country or currency union manages the currency about other currencies and the foreign exchange market.It is closely related to monetary policy and the two are generally dependent on many of the same factors, such as economic scale and openness, inflation rate, the elasticity of the labor market, financial market development, and ...
Fixed exchange rate; Floating exchange rate; Linked exchange rate; Managed float regime; ... This is a list of countries by their exchange rate regime. [1]
Countries are free to choose which type of exchange rate regime they will apply to their currency. The main types of exchange rate regimes are: free-floating, pegged (fixed), or a hybrid. In free-floating regimes, exchange rates are allowed to vary against each other according to the market forces of supply and demand.
Although a currency board is a common (and simple) way of maintaining a fixed exchange rate, it is not the only way. Countries often keep exchange rates within a narrow band by regulating balance of payments through various capital controls , or though international agreements, among other methods .
Intermediate regimes: horizontal bands, crawling pegs and crawling bands; Flexible regimes: managed and independent floats; All monetary regimes except for the permanently fixed regime experience the time inconsistency problem and exchange rate volatility, albeit to different degrees.
In macroeconomics, crawling peg is an exchange rate regime that allows currency depreciation or appreciation to happen gradually. It is usually seen as a part of a fixed exchange rate regime. The system is a method to fully use the key attributes of the fixed exchange regimes, as well as the flexibility of the floating exchange rate regime. The ...
In macroeconomics and modern monetary policy, a devaluation is an official lowering of the value of a country's currency within a fixed exchange-rate system, in which a monetary authority formally sets a lower exchange rate of the national currency in relation to a foreign reference currency or currency basket.