difference between fixed exchange rate + flex. peg? (1 Viewer)

[hatty]

sup all

so whats the difference between these 2?

they both look pretty similar

cheers

 

[ashwin]

they r basically the same. im thinking flexible peg might be like mangaged exchange rates where the exchange rate is kept within a target zone, rather than at a fixed number.

 

[hatty]

cheers mate

 

[symo]

A fixed exchange rate is where the gov officially sets the exchange rate. In Australia it was used until '76. The gov obtained foreign reserves by insisting foreign holding be logdged with them.

A managed flexible peg or crawling peg system is where the gov/RBA pegs the value of the $A at 9am every day. this system was used in Australia between '76 and '83

Adam