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Crawling Peg |
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Crawling peg An automatic system for revising the exchange rate. It involves establishing a par value around which the rate can vary up to a given percent. The par value is revised regularly according to a formula determined by the authorities. Crawling Peg A situation in which one currency links its value to that of another currency, but allows it to fluctuate within certain limits. This differs from a straight peg, which has one currency permanently valued at a certain amount in relation to another currency; it also differs from a floating currency, which changes in value according to market factors. A crawling peg may be valuable if a currency would otherwise be exceptionally volatile; it allows the currency to fluctuate to an acceptable level. 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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Medium-term: For the three years after that, approximately 2009-11, re-peg the renminbi to a basket of currencies of China's major trading partners, and use a crawling peg system, like those of Taiwan and Singapore, to allow currency flexibility. Fitch notes that the central bank's intention to move toward the exchange rate bands system from the crawling peg regime in the coming months could improve its ability to implement monetary policy. This, combined with the country's crawling peg exchange rate regime, limited 'usable' international reserves as well as a relatively weak banking sector have increased the vulnerability of Costa Rica to external shocks. |
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