pegs

Pegs are fixed exchange rates where a country's government or central bank sets and maintains the value of its currency at a specific rate to another currency or a basket of currencies. This helps promote economic stability by reducing fluctuations and uncertainty in international trade and investments. To keep the peg, authorities buy or sell their currency as needed, ensuring its value stays close to the target rate. While pegs can provide stability, they require active management and reserves, and may limit a country's monetary policy flexibility if economic conditions change.