Depeg

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Depeg

To remove a previously instituted peg on a currency. For example, if Currency A is pegged to Currency B at a 1:1 ratio, but the central bank for Currency A decides to let it float, it is said to be depegged from Currency B. Depegging may occur if the peg is causing inflation or if the central bank is unable to sustain the peg for other reasons.
References in periodicals archive ?
The papers from that conference appear in this issue of the Cato Journal along with articles by Peter Bernholz on the recent depegging of the Swiss franc and by Tyler Watts and Lukas Snyder on the resource costs of fiat versus commodity money.
Interestingly, rates on loans in euros increased by much less, suggesting that investors were more worried about the risk of euro depegging rather than about credit risk (see figure 7).
In 2008, hot money flowed into dollar-pegged markets as speculators hoped to benefit from a depegging of local currencies.
intentions to depegging the local currency, Dirham, to the US Dollar nor
There is plenty of evidence today that the Gulf economies as a whole will neither consider devaluing or depegging from the dollar as it is neither prudent nor serves an economic purpose," he said.
Summary: Depegging looks improbable says Abdulrahman Al-Attiyah
No change is likely soon, but we continue to believe that the arguments for depegging are strong and anticipate they will gain traction as the temporarily aligned policy needs of the US and the Gulf diverge," he said.
In comments to Bloomberg after meeting US Treasury Secretary Timothy Geithner, Al Suwaidi said the UAE has no intention of depegging its currency from the dollar.
The US dollar lost its position as the currency of choice for sukuk issuance this year, not only because of its weakness but also due to speculation about the depegging of some GCC currencies from the dollar," said Mr Damak.
This reflected in part the increased reliance of banks on non-resident deposits during 2007 to fund their activities, and in part a rise in speculative positions by non-residents betting on an appreciation in the dinar, both before and after depegging it for the US dollar.
Talk of Gulf countries, particularly the UAE and Qatar, either revaluating or depegging from the US dollar have been doing the rounds for the last six to eight months.
Khan pointed out that the depegging of GCC currencies from the dollar, despite the immediate relief of currency appreciation, would reduce the value of huge GCC foreign financial assets held in dollars.