Fixed Currency

(redirected from Pegged Currencies)

Fixed Currency

A currency to which the government has linked the value of another currency or, rarely, some valuable commodity like gold. For example, under the Bretton Woods System, most world currencies fixed themselves to the U.S. dollar, which in turn fixed itself to gold. A government may fix its currency by holding reserves of the other currency (or the asset to which it is fixed) in the central bank. For example, if a country fixes its currency to the British pound, it must hold enough pounds in reserve to account for all of its currency in circulation.
References in periodicals archive ?
As part of our risk management program, we take a conservative approach to managing our exposure to pegged currencies so that we are well positioned in the event of unexpected central bank policy changes, such as the People's Bank of China's (PBC) announcement last night to devalue the yuan and the Swiss National Bank's policy change earlier this year," continued Mr.
Another theme which could be important for the GCC's US Dollar pegged currencies is the upcoming Fed policy normalization and the ongoing strengthening view on the dollar.
Another theme which could be important for the GCC's dollar pegged currencies is the upcoming federal policy normalisation and the ongoing strengthening view on the dollar.
GCC economies have a huge stake inthe US central bank's monetary policies, due to the region's pegged currencies.
There are significant investments from this region going into these core cities aACA* the euro has dropped against the dollar by around 20 per cent in the last 7 months, so at the moment it is a good time to be purchasing with dollar pegged currencies," he said.
Mishra likes countries prone to "solid macroeconomic fundamentals, pegged currencies [to the US dollar] and low correlations to developed markets".
The GCC's economic diversification initiatives, growth in non-hydrocarbon sectors, pegged currencies, large forex reserves, well-developed infrastructure, and a moderate inflation environment provide an overall attractive business environment vis-a-vis emerging economies, it said.
If the dollar was to weaken (leading to similar depreciation of pegged currencies in the Gulf), then the price of oil would tend to increase, boosting hydrocarbon revenue and partly offsetting the impact of any increases in import costs on government finances and the balance of payments.
Bahrain was just a part and parcel of what has become a global quest for yield, which is ultimately the result of quantitative easing in the US and Europe, which in turn is being exported around the world through pegged currencies.
Back when the world had tradable pegged currencies, the market often attacked pegs it deemed to be unsustainable.
Even pegged currencies can expose executives to market fluctuations.
Market analyst Joseph Trevisani, speaking in Beirut last week, said the weaker euro offers expanded buying power for dollar pegged currencies, while putting a downward pressure on inflation.