Fixed currency
Encyclopedia : F : FI : FIX : Fixed currency
A fixed currency, less commonly called a pegged currency, is a currency that uses a fixed exchange rate as its exchange rate regime. In the modern world, fixed currencies form a minority of the world's currencies. Prior to the 1970s, the Bretton Woods system made fixed currencies the norm; however, in 1973, the United States government abandoned the gold standard, so that the US dollar was no longer a fixed currency, and most of the world's currencies followed suit.
A fixed currency is contrasted with a floating currency. Fixing a currency represents a particular type of monetary policy. Most currencies with currently fixed exchange rates are pegged to either the U.S. dollar (the dollar standard) or the euro (the euro standard).
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