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Currency Basket |
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Currency basket The value of a portfolio of specific amounts of individual currencies, used as the basis for setting the market value of another currency. It is also referred to as a currency cocktail. Currency Basket A portfolio of several currencies with different weightings. For example, one may construct a currency basket with 40% euros, 35% U.S. dollars, and 25% British pounds; the percentages determine the basket's value. Using a currency basket is a common way to peg a currency without overexposing it to the fluctuations of a single currency. For example, Kuwait shifted the peg of the Kuwaiti dinar to a currency basket from the U.S. dollar in 2007 because the dollar was weak at the time, resulting in high inflation. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| A currency basket is commonly used in contracts as a way of avoiding (or minimizing) the risk of currency fluctuations. A currency basket is commonly used in contracts as a way of avoiding (or minimizing) the risk of currency fluctuations. A currency basket is commonly used in contracts as a way of avoiding (or minimizing) the risk of currency fluctuations. |
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