6 votes
Accepted

How can the HKMA peg the Hong Kong dollar at 7.8 HKD/USD for so long?

To maintain the currency peg, the Hong Kong Monetary Authority (HKMA) has to buy HKD and sell USD when the currency comes under depreciation pressure and sell HKD and buy USD when the currency comes ...
M3RS's user avatar
  • 1,087
2 votes
Accepted

Why would Switzerland, with its export-driven economy, worry about weakening against the dollar?

Its not totally clear, but it seems that what they are saying is that, as long as the euro was a strong currency, they did not want to have the frank much stronger than the euro. Later, on, when the ...
Fix.B.'s user avatar
  • 2,658
2 votes

How does Egypt prevent people from arbitraging their currency?

Used to be capital controls. You could only buy dollars (or any other foreign currency) through official channels at the official favorable rates by providing documentation displaying need for said ...
tvbc's user avatar
  • 114
1 vote

Is it possible to peg a cryptocurrency to a stock or bond index?

There are already cryptocurrencies that are backed 1:1 by dollar, see Tether and USDC, or even backed with gold, see Paxos Gold, and yes all of that are redeemable. there is no problem with it so far. ...
Fahrul's user avatar
  • 41
1 vote
Accepted

How can a one currency gain against the other if it is pegged aginst it?

Strictly speaking it was not a peg but a cap: the Swiss National Bank said it would sell unlimited Swiss Francs at the rate of 1.2 CHF : 1 EUR. You could have bet that the Euro would rise against ...
Henry's user avatar
  • 4,765
1 vote
Accepted

How could having more US dollars solidified the 1991 Argentine peg to the US dollar?

For the central bank to decrease the currency supply and raise the value of the Peso they need something to buy up the currency with. They can't simply ask for donations of Pesos, they have to buy ...
TheSaint321's user avatar
1 vote

How could having more US dollars solidified the 1991 Argentine peg to the US dollar?

Simply having more dollars may have served two purposes. Firstly, more dollars would mean that the central bank could have bought more pesos and exerted some upward pressure on the exchange rate. ...
ts_highbury's user avatar
1 vote

What economics aggregate(s) could suggest an imminent change in exchange rates?

There's a bunch of things you could look at. Here's a couple: Foreign currency reserves. Does Switzerland have a lot of dollars on hand? If so, there's nothing to worry about, the peg will hold. ...
Closed Limelike Curves's user avatar

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