exchange rate regimes

Exchange rate regimes refer to the way a country manages its currency's value in relation to other currencies. There are three main types: 1. **Fixed regime**: The currency’s value is tied to another major currency, like the US dollar, which stabilizes prices but limits economic flexibility. 2. **Floating regime**: The currency’s value fluctuates based on supply and demand in the foreign exchange market, allowing for more flexibility but potentially resulting in volatility. 3. **Pegged regime**: The currency is maintained within a specific range relative to another currency, combining elements of both fixed and floating systems.