Question

pegging and parity differences?​

Answer 1

✨a conventional fixed peg arrangement, a country pegs its currency within margins of ±1% versus another currency or a basket that includes the currencies of its major trading or financial partners. The monetary authority can maintain exchange rates within the band by purchasing or selling foreign currencies in the foreign exchange markets. Also, the country can use indirect intervention, including changes in interest rate policy, regulation of foreign exchange transactions, and convincing people to constrain foreign exchange activity.In a system of pegged exchange rates within horizontal bands, the permitted fluctuations in currency value relative to another currency or basket of currencies are wider (e.g., ±2%).With a crawling peg, the exchange rate is adjusted periodically, typically to adjust for higher inflation versus the currency used in the peg. This is termed a passive crawling peg, as opposed to an active crawling peg in which a series of exchange rate adjustments over time is announced and implemented.✨

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Answer 2

Answer:

In economics, pegging a price, rate or amount implies fixing it at a particular level. ... Parity value or parity price, on the other hand,is a price concept used for commodities or securities. It is used to imply that two assets have an equal value.

Explanation:

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