A crawling peg refers to:
A) a large and sudden currency depreciation.
B) a fixed exchange rate regime in which the currency is adjusted very frequently to reflect market conditions.
C) a managed or dirty float, depending on the business cycle.
D) a drag on exchange rate adjustment caused by imperfect markets.

Question

Quizplus · Accepted Answer

A crawling peg is a fixed exchange rate regime in which the currency is adjusted frequently, usually on a daily or weekly basis, to reflect market conditions. The adjustments are typically small, hence "crawling" rather than sudden or drastic. This approach is used by some countries as a way to maintain exchange rate stability while still allowing some flexibility in response to changing economic conditions.

A Crawling Peg Refers To