Pegging

In the context of currency management, several governments peg i.e. fix the value of their currencies to the value of another currency, either as a fixed peg or allowing for some fluctuation through a system of banding. While this keeps the value of the currency stable, currency pegs do need managing from the perspective of the government maintaining the peg. The Hong Kong dollar is pegged to the US dollar; the CFA franc, the currency of several West African countries, is pegged to the euro.

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