Basket Pegger

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Basket Pegger

A nation with a currency that is pegged to a portfolio of several currencies with different weightings. For example, a basket pegger may attach its currency to a portfolio consisting of 40% euros, 35% U.S. dollars and 25% British pounds; these percentages determine the basket's value. Basket peggers usually follow this policy to peg their currencies without overexposing them to the fluctuations of a single currency. For example, Kuwait shifted the peg of the Kuwaiti dinar from the U.S. dollar to a currency basket in 2007 because the dollar was weak at the time and resulted in high inflation.