A fixed or pegged regime sets a predetermined band or par value for a currency.

Question

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A fixed or pegged exchange rate regime involves setting a predetermined value or band for a currency against another currency or a basket of currencies, and maintaining that value through government intervention in the foreign exchange market. This is in contrast to a floating exchange rate regime where the exchange rate is determined by market forces of supply and demand.

A Fixed or Pegged Regime Sets a Predetermined Band or Par