Fixed Exchange Rate System

Fixed Exchange Rate is a country’s exchange charge regime under government or key bank ties the official exchange rate to a new country’s currency. The objective of a fixed exchange rate system is usually to maintain a nation’s currency value inside a very narrow group. Also known because pegged exchange charge. Fixed rates supply greater certainty regarding exporters and importers. This also helps the federal maintain low inflation, which eventually should keep interest levels down and promote increased trade as well as investment.