Currency band
Foreign exchange |
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Exchange rates |
Markets |
Assets |
Historical agreements |
See also |
A currency band is a range of values for the exchange rate for a country’s currency which the country’s central bank acts to keep the exchange rate within.[citation needed]
The central bank selects a range, or "band", of values at which to set their currency, and will intervene in the market or return to a fixed exchange rate if the value of their currency shifts outside this band. This allows for some revaluation, but tends to stabilize the currency's value within the band. In this sense, it is a compromise between a fixed (or "pegged") exchange rate and a floating exchange rate.[1]
For example, the exchange rate of the
See also
References
- ^ "Investopedia Currency Band Definition"
- ^ China Vows Wider Yuan Movement April 18, 2013 Wall Street Journal