Managed Exchange Rate Systems Part 1



To avoid the volatility and uncertainty that often accompany a floating exchange rate, some governments and central banks choose to manage or peg their …

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Managed Exchange Rate Systems Part 1

To avoid the volatility and uncertainty that often accompany a floating exchange rate, some governments and central banks choose to manage or peg their currency's value against another currency. This lesson explains the tools by which an exchange rate can be managed and maintained within a range of values, using the Swiss National Bank's decision to peg the Swiss franc against the euro in 2011 as an example.

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