A country that pegs its exchange rate to another exchange rate does not have complete control over its interest rates.

Name: A country that pegs its exchange rate to another exchange rate does not have complete control over its interest rates.
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Question

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When a country pegs its exchange rate to another currency, it must align its interest rates with those of the currency to which it is pegged to maintain the peg, thus losing control over its own interest rate policy.

A Country That Pegs Its Exchange Rate to Another Exchange