Basket Peg

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Basket Peg

The policy of pegging a currency to a portfolio of several currencies with different weightings. For example, a basket peg may consist of 40% euros, 35% U.S. dollars and 25% British pounds; these percentages determine the basket's value. A country usually follows a basket peg to attach its currency to another without overexposing it to the fluctuations of a single currency. For example, Kuwait shifted to a basket peg in 2007 because the U.S. dollar, to which it was attached previously, was weak at the time, resulting in high inflation.
References in periodicals archive ?
A co-ordinated revaluation against the dollar by GCC states, rather than currency basket pegs, could be the most likely compromise for the bloc.