A monetary regime based on an explicit commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate is known as a ________.

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A monetary regime based on an explicit commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate is known as a currency board. This system requires a country to hold sufficient foreign currency reserves to ensure that it can fully back its domestic currency. Unlike a fixed exchange rate system, a currency board has no discretion to adjust its exchange rate or monetary policy. Bretton Woods Agreement is a specific fixed exchange rate system that existed between 1944 and 1971. A pegged exchange rate system is a more general term that can refer to any system where a country attempts to fix the value of its currency in relation to another.

A Monetary Regime Based on an Explicit Commitment to Exchange