Pegged Rate

A pegged rate is when a country's government or central bank sets a fixed exchange rate for its currency against another currency or a basket of currencies. This means the country maintains a steady value for its currency, often by buying or selling its currency in the foreign exchange market to keep it at that level. The goal is to provide stability, promote trade, and control inflation. For example, if a country's currency is pegged to the US dollar at a 1:1 rate, one unit of their currency is always worth one US dollar.