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Pegged Currency.
A fixed or pegged currency is one where the currency’s value is matched to that of another asset. The asset may be a single currency, or it may be a basket. The fixed rate will be determined by central banks, and will be defended and maintained in order to protect economic stability. Fixed exchange rate mechanisms can be introduced for a number of reasons, and offer a number of advantages or disadvantages for the economy of the nation which utilizes them.
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