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Economics
Currency Peg
When a country promises to keep its money worth exactly the same as another currency, like the U.S. dollar.
Pegs make business predictable but the country has to keep huge reserves of the strong currency to defend the peg. If it breaks, the currency can crash hard and fast.It's like tying your boat to a strong dock so it doesn't float away no matter how rough the waves get.
Real world: Hong Kong has kept its dollar pegged to the U.S. dollar for decades, which keeps prices stable and makes trade easy.
💡 A currency peg is a promise that can make life calm — until the day it can't be kept anymore.