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Exchange rate regime

Exchange rate regime Definition

The Exchange Rate Regime is the way a country manages its currency in respect to foreign currencies and the foreign exchange (FX) market.

The basic types are a floating exchange rate, where the market dictates the movements of the exchange rate, a Pegged Float, where the central bank keeps the rate from deviating too far from a target band or value, and the pegged exchange rate, which ties the currency to another currency, mostly more widespread currencies s.a. the U.S. Dollar or the Euro.








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