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Single Currency Peg |
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Single Currency Peg An exchange rate for a currency whose value the government has decided to link to another currency, as opposed to a currency basket or a commodity like gold. For example, under the Bretton Woods System, most world currencies fixed themselves to the U.S. dollar, forming a single currency peg across most of the world. Under a single currency peg, a government must hold enough reserves of the peg 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. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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