Questions tagged [fixed exchange rate]

Bianca Mon Jan 13 2025 | 6 answers 1230

I'm trying to understand what a fixed or pegged exchange rate is. I've heard about it in the context of currencies and financial markets, but I'm not entirely sure how it works or what its implications are.

Daniele Tue Nov 19 2024 | 5 answers 900

I'm trying to understand the financial term 'pegged' and if it means the same thing as a 'fixed exchange rate'. Could someone clarify this for me?

CryptoAlly Fri Oct 11 2024 | 5 answers 1073

I don't understand this question. Could you please assist me in answering it?

BitcoinBaroness Tue Oct 08 2024 | 7 answers 1773

Can you explain the key distinctions between a fixed and free exchange rate system? How do they differ in terms of their functioning, the role of central banks, and the level of market influence? Which one offers more stability, and which one allows for greater flexibility in response to economic changes? Additionally, what are the potential advantages and disadvantages of each system?

Alessandra Tue Oct 08 2024 | 6 answers 1408

I understand that you may have some confusion regarding the Hong Kong Dollar (HKD) and its relationship with the US Dollar (USD). So, let me clarify this for you. Are you asking if the Hong Kong Dollar is pegged to the US Dollar? If so, the answer is yes. The Hong Kong Monetary Authority maintains a policy of linking the value of the Hong Kong Dollar to the US Dollar at a rate of approximately 7.80 HKD to 1 USD. This system, known as the Linked Exchange Rate System, has been in place since 1983 and has helped to maintain stability in the Hong Kong economy. However, it's important to note that while the HKD is pegged to the USD, it is not a fixed exchange rate system, and the HKD can still fluctuate within a narrow range around the pegged rate. Does this help answer your question?