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fixed exchange rate
(redirected from Fixed exchange rates)

   Also found in: Wikipedia 0.04 sec.
Fixed exchange rate
A country's decision to tie the value of its currency to another country's currency, gold (or another commodity), or a basket of currencies.

fixed exchange rate
An exchange rate between currencies that is set by the governments involved rather than being allowed to fluctuate freely with market forces. In order to keep currencies trading at the prescribed levels, government monetary authorities actively enter the currency markets to buy and sell according to variations in supply and demand. Compare floating exchange rate. See also devaluation.


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The government brought spending in line with revenues and moved away from fixed exchange rates, allowing the Indian currency to reflect world prices.
Even under fixed exchange rates it is therefore likely that trade imbalances will disappear over time.
Such a view must have seemed then like an academic curiosity, the academy said, because at the time all countries were linked together by fixed exchange rates within the so-called Bretton Woods System.
 
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