Describe the purposes of a fixed currency regime

Question

Social Studies

Barrett Chambers

7 July, 19:27

Describe the purposes of a fixed currency regime

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Answers (2)

Know the Answer?

Violet Kidd · Answer 1

A fixed exchange rate is a regime applied by a government or central bank ties the country's currency official exchange rate to another country's currency or the price of gold. The purpose of a fixed exchange rate system is to keep a currency's value within a narrow band

Corey Hodge · Answer 2

A fixed exchange rate is a regime applied by a government or central bank ties the country's currency official exchange rate to another country's currency or the price of gold. The purpose of a fixed exchange rate system is to keep a currency's value within a narrow band.

Explanation:

In 2018, according to BBC News, Iran set a fixed exchange rate of 42,000 rials to the dollar, after losing 8% against the dollar in a single day. The government decided to remove the discrepancy between the rate traders used-60,000 rials-and the official rate, which at the time was 37,000.