A currency pegged at a value above the market equilibrium exchange rate is

Question

Quizplus · Accepted Answer

If a currency is pegged at a value above the market equilibrium exchange rate, it means that the government or central bank has set a rate that is higher than what the market would naturally dictate. This makes the currency overvalued because it is more expensive than what it should be according to supply and demand, and it may lead to a decreased demand for exports and an increased demand for imports.

A Currency Pegged at a Value Above the Market Equilibrium