Adjustable Peg

AAA

DEFINITION of 'Adjustable Peg'

An exchange rate policy adopted by some countries wherein the national currency is largely pegged or fixed to a major currency such as the U.S. dollar or euro, but can be readjusted from time to time within a narrow interval. The periodic adjustments can are usually intended to improve the country's competitive position in the export market.

INVESTOPEDIA EXPLAINS 'Adjustable Peg'

Following the adoption of the Bretton Woods system in 1944, most Western European nations pegged their currencies to the U.S. dollar, until 1971.


The Chinese renminbi or yuan was informally pegged to the US dollar in the mid-1990s until 2005 at a rate of approximately 8.28 per dollar. The peg was adjusted to about 6.83 yuan per U.S. dollar from July 2008, after three years of appreciation.

RELATED TERMS
  1. Devaluation

    A deliberate downward adjustment to the value of a country's ...
  2. Currency Peg

    A country or government's exchange-rate policy of pegging the ...
  3. Dirty Float

    A system of floating exchange rates in which the government or ...
  4. Floating Exchange Rate

    A country's exchange rate regime where its currency is set by ...
  5. Crawling Peg

    A system of exchange rate adjustment in which a currency with ...
  6. Balassa-Samuelson Effect

    Countries with high productivity growth also experience high ...
Related Articles
  1. Why China's Currency Tangos With The ...
    Forex Education

    Why China's Currency Tangos With The ...

  2. America's Loss Is The Currency Market's ...
    Forex Education

    America's Loss Is The Currency Market's ...

  3. Currency Exchange: Floating Rate Vs. ...
    Forex Education

    Currency Exchange: Floating Rate Vs. ...

  4. The Currency Board: Understanding The ...
    Personal Finance

    The Currency Board: Understanding The ...

comments powered by Disqus
Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  3. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  4. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center