Question

how is fixed rate of exchange determined?​

Answer 1

Answer:

Fixed Exchange Rates. Currency prices can be determined in two main ways: a floating rate or a fixed rate. ... Therefore, if the demand for the currency is high, the value will increase. If demand is low, this will drive that currency price lower.

Explanation:

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Answer 2

In a fixed exchange rate system, a country's central bank typically uses an open market mechanism and is committed at all times to buy and/or sell its currency at a fixed price in order to maintain its pegged ratio and, hence, the stable value of its currency in relation to the reference to which it is pegged.