A fixed exchange-rate system (also known as pegged exchange rate system) is a currency system in which governments try to maintain their currency value constant against one another. In a fixed exchange-rate system, a country’s government decides the worth of its currency in terms of either a fixed weight of gold, a fixed amount of another currency or a basket of other currencies. The central bank of a country remains committed at all times to buy and sell its currency at a fixed price. The central bank provides foreign currency needed to finance payments imbalances.
Read more about Fixed Exchange-rate System: History, Mechanism, Hybrid Exchange Rate Systems, Advantages, Disadvantages, See Also
Famous quotes containing the words fixed and/or system:
“It is the fixed that horrifies us, the fixed that assails us with the tremendous force of mindlessness. The fixed is a Mason jar, and we can’t beat it open. ...The fixed is a world without fire--dead flint, dead tinder, and nowhere a spark. It is motion without direction, force without power, the aimless procession of caterpillars round the rim of a vase, and I hate it because at any moment I myself might step to that charmed and glistening thread.”
—Annie Dillard (b. 1945)
“He is not a true man of science who does not bring some sympathy to his studies, and expect to learn something by behavior as well as by application. It is childish to rest in the discovery of mere coincidences, or of partial and extraneous laws. The study of geometry is a petty and idle exercise of the mind, if it is applied to no larger system than the starry one.”
—Henry David Thoreau (1817–1862)