currency peg
KER-un-see PEG
ˈkɜːrənsi pɛɡListen
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Dictionary meaning
a fixed exchange rate arrangement in which a country ties the value of its currency to another currency, a basket of currencies, or an external standard such as gold; currency pegs provide exchange rate stability that facilitates trade and investment and can serve as an anchor for inflation expectations; however, maintaining a peg requires holding substantial foreign exchange reserves and may force countries to adopt interest rate policies inconsistent with domestic economic conditions; currency pegs can come under speculative attack when markets doubt a government's ability to maintain the fixed rate
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