Crawling peg


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Related to Crawling peg: Currency board, Managed float

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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Progress in this area with a more flexible monetary policy, rather than a return to a crawling peg, might be beneficial for the country.
The crawling peg lasted until June 1982 when the Government introduced a wage and price freeze as part of a heterodox approach to markedly reduce the high inflation rate.
rate within horizontal bands (3) Crawling peg (8) Iraq Iran Crawling band (2) Azerbaijan Managed floating with Algeria no pre-determined path for the exchange rate (44) Independently floating (40) Exchange rate Inflation arrangement (Number Monetary targeting Other1 of countries) aggregate framework target (22) (44) (11) Other conventional fixed peg arrangement (68) Pegged exchange rate within horizontal bands (3) Crawling peg (8) Crawling band (2) Managed floating with Armenia Egypt no pre-determined path (6) India for the exchange rate (44) Independently Cyprus Malta (7) Somalia floating (40) (7)Israel Turkey (8) Source: The IMF Variable Coefficient Std.
The downgrade of the local currency ratings of Botswana to the level of its foreign-currency ratings is largely based on its crawling peg and underdeveloped domestic debt market, S&P said.
In addition, China and Vietnam have officially adopted a type of managed float known as a "crawling peg"--that typically includes either the gradual appreciation or depreciation of the currency over time against one or more currencies.
In order to explore the implications of the exchange rate system, a regime of completely flexible exchange rates is compared to a crawling peg regime and to a regime of fixed exchange rates.
By the same token, the yuan's crawling peg and the consequent rapid build-up of foreign reserves have led to excessive liquidity growth and created serious economic distortions, notably in the asset markets where asset price inflation has been rampant.
Another option was widening the fluctuation band and following a crawling peg to the US dollar.
In October 1991, the fixed rate was abandoned and a preannounced crawling peg system was introduced.
Equation (3) defines the exchange rate regime of the country as a passive crawling peg. Parameter [phi] determines the extent to which devaluation compensates for past inflation, with [phi] = 0 corresponding to a fixed exchange rate regime and [phi] = 1 corresponding to real exchange rate targeting.
The plan limited the lira's depreciation through a crawling peg exchange rate, while imposing budgetary restraint and structural reforms to cut state spending and modernise the economy.