Depeg

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Depeg

To remove a previously instituted peg on a currency. For example, if Currency A is pegged to Currency B at a 1:1 ratio, but the central bank for Currency A decides to let it float, it is said to be depegged from Currency B. Depegging may occur if the peg is causing inflation or if the central bank is unable to sustain the peg for other reasons.
References in periodicals archive ?
"The resources are available to not de-peg. Breaking a peg can be a traumatic experience and quite hard to deal with.
'When a finance minister begins to equate the exchange rate with manhood, there is inevitably a problem.' I advised him to de-peg the Argentinian peso to the American dollar and let the domestic currency float.
Additionally, some Gulf banks, particularly those in Qatar have to bring back substantial negative US dollar positions to below 25 per cent of shareholders' equity, protecting the banks from a potential de-peg.
Six GCC countries have been in talks since 2001 to de-peg from the dollar and create a single currency.
But any decision to de-peg the rial from the dollar depends heavily on Oman's foreign reserves.
"In the Argentinian case, they were able to de-peg the peso from the US dollar but it still resulted in a currency collapse and banking crisis," he said.
Saudi Arabia has no plans to de-peg its currency from the US dollar, the nation's central bank governor said Monday.
Were any currency to de-peg from the dollar, they would soar in value overnight and income (arriving in dollars) would plummet.
"China is unlikely to de-peg the yuan anytime soon," Standard Chartered Bank said in a note to clients.
Geithner on Saturday delayed an April 15 report to Congress on whether China manipulates its yuan currency, pledging to work instead with Group of 20 members -- India and China included -- to persuade Beijing to de-peg its yuan from the dollar.
Eventually, the only solution for them would be to de-peg their currencies from the US dollar, hence the prospective formation of a brand new, freely floated currency to be used by the six GCC states.
For instance, in 2007: EAEThere was too much talk going around relating to de-pegging the dirham, and we saw lot of interest from people trying to sell dollar and buy dirham in anticipation that it would de-peg,Eo notes Rawashdeh.