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Floating exchange rates

Understanding the Differences Between Currency Pegs and Floating Rates

November 22, 2023

How do currency pegs and floating exchange rates differ in the foreign exchange market?

Currency pegs and floating exchange rates differ in the foreign exchange market. A currency peg involves fixing a country's currency to another, typically a stronger one or a basket of currencies, whereas floating exchange rates are determined by market forces, fluctuating based on supply and demand.

Tags : Currency Pegs , Floating Exchange Rates , Foreign Exchange Market

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