The crawling peg is a
A) Fixed exchange rate system
B) Floating exchange rate system
C) Compromise between fixed and floating exchange rates
D) Exchange rate system used by nations experiencing no inflation

Question

Quizplus · Accepted Answer

The crawling peg is a compromise between fixed and floating exchange rates. In this system, the exchange rate is allowed to fluctuate within a certain range, but the central bank will intervene to prevent rapid or excessive movements in the exchange rate. This system is designed to provide some flexibility while also maintaining stability in the exchange rate, and is often used by countries that want to maintain some control over their exchange rate while still allowing market forces to have some influence.

The Crawling Peg Is a