Currency peg:
A currency peg is a policy in which a national
government or central bank sets a fixed exchange rate for its currency with a
foreign currency or a basket of .
Why Would a Country
Peg Their Currency
The most common reasons include? encouraging trade between nations, reducing the risks associated with expanding into broader markets and stabilizing the economy.
Fixed exchange rate system:
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.
Currency Basket:
A currency basket is a portfolio of selected currencies with
different weightings. A currency basket is commonly used by investors to
minimize the risk of currency fluctuations and also governments when setting
the market value of a country’s currency.