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Quantitative Finance · Glossary

What is Currency peg, currency band, FX intervention?

Also known as: currency peg · currency band · FX intervention

Definition 18.6 Markets II: Rates, FX and Credit · Chapter 18 — Emerging-Market FX and NDFs

A currency peg is a policy of holding the exchange rate at a fixed level against another currency; a currency band lets it move within set limits around a central rate. An FX intervention is the purchase or sale of foreign currency by the authorities to move or hold the rate.

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