Crawling peg

(redirected from crawling-peg)
Also found in: Dictionary.

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 ?
While a crawling-peg system can eliminate short-term depreciation expectations, thereby reducing the associated capital outflows, it cannot eliminate depreciation expectations in the more distant future, let alone reduce capital outflows unrelated to depreciation expectations.
Again, the current account improves over the simulation horizon, but less so than in the crawling-peg scenario.
Despite a significant fall during 1996, inflation remains high and the pre-announced crawling-peg policy will exert only a limited disinflationary influence in 1997.
The crawling-peg exchange rate policy is designed to be less than fully accommodating and, along with falling real wages, has contributed to lower inflation.