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.

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.
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.
This has led some analysts to assert that China and Vietnam have abandoned the crawling peg in favor of either a pegged exchange rate or a managed float.
On the other hand, in the simulations with a crawling peg regime and with fixed exchange rates, the Slovenian short-term interest rate is determined by the exchange rate and by the short-term interest rate in the Euro Area.
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.
Equation (3) defines the exchange rate regime of the country as a passive crawling peg.
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.
The fiscal loosening goes well beyond the working of automatic stabilisers and risks conflicting with the ambitious monetary objectives adopted after the monetary regime change in mid-2001, when the crawling peg was abandoned, the fluctuation band of the currency widened and new inflation targets dedicated to meeting the EMU inflation criteria within a few years introduced.
The EU pinpoints the weaknesses of the stabilisation programme - particularly insufficient attention to the restructuring of the banking sector and to other structural reforms - as the causes of the financial crises in November 2000 and February 2001, when the Turkish authorities had to abandon the crawling peg exchange rate regime, which had been at the heart of the stabilisation programme.