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General TradingP
Peg
A fixed exchange rate policy where the value of one currency is tied to another currency or asset. Central banks maintain pegs by buying or selling reserves. In crypto, stablecoins are pegged to fiat currencies like the US Dollar.
Example
“The Hong Kong Dollar is pegged to the US Dollar in a narrow band of 7.75–7.85, with the Hong Kong Monetary Authority intervening whenever the rate approaches either limit.”