Meaning & use
pegged currencies
Last updated
Meanings
phrasepluralfinance
Currencies whose value is fixed to another currency or a basket of currencies.
Grammar: Always used in the plural; for a single one, say 'a pegged currency'.
Patterns
- pegged currencies against something
- a system of pegged currencies
Many oil-exporting countries have pegged currencies to the US dollar.
Investors watch pegged currencies closely for signs of devaluation.
The central bank defended its pegged currency despite market pressure.
phrasepluralfinance
A monetary system in which exchange rates are fixed by government policy.
Grammar: Often used with 'system' or 'regime': 'a system of pegged currencies'.
Patterns
- maintain pegged currencies
- abandon pegged currencies
The Bretton Woods system relied on pegged currencies linked to the dollar.
Some economists argue that pegged currencies reduce flexibility in monetary policy.
During the crisis, several nations were forced to abandon their pegged currencies.
Word forms
| singular | pegged currency |
|---|
Common combinations
- pegged to the dollar
- The country's currency is pegged to the dollar at a fixed rate.
- defend a pegged currency
- The central bank raised interest rates to defend the pegged currency.
- abandon a pegged currency
- Facing a speculative attack, the government decided to abandon its pegged currency.
- maintain pegged currencies
- It is costly for small economies to maintain pegged currencies.
Synonyms and how they differ
- fixed exchange rate
- Refers to the rate itself, not the currency; use 'pegged currency' when focusing on the money.
- currency board
- A specific institutional arrangement that issues local money backed by foreign reserves; a pegged currency may or may not use a currency board.
Opposites
Word family
Commonly confused: pegged currencies or pegged?
pegged currencies vs pegged
As an adjective, 'pegged' can mean 'fixed' or 'identified', not just related to currency.
Practice
Which sentence uses 'pegged currencies' correctly?
Choose one answer.
Option 2 correctly uses the plural phrase to refer to multiple currencies that are fixed. Option 0 is wrong because 'adopt pegged currencies to' is not the standard pattern; we say 'peg a currency to another'. Option 1 is too absolute; pegged currencies are not always more stable. Option 3 confuses with the verb 'peg' meaning 'attach'.
Make it your own
Write a sentence using “pegged currencies”, then check it and compare it with the examples above.