Topic Videos

Key Diagrams - Semi-Fixed and Fixed Exchange Rates

Level:
A-Level, IB
Board:
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Last updated 30 May 2022

In this short revision video we use supply and demand analysis to explain semi-fixed exchange rate systems.

Key Diagrams - Semi-Fixed and Fixed Exchange Rates

In a semi-fixed currency system, the exchange rate is allowed to fluctuate day-to-day between a specified range before a nation’s central bank will intervene to help bring a currency back within target range. The frequency with which this happens depends on the width of the band of fluctuation given to a currency.

IMF Survey of Currency Systems (2021)

Countries with a semi-fixed exchange rate:

  • Singapore
  • Bangladesh
  • Ethiopia
  • Rwanda
  • Romania
  • Costa Rica

IMF Survey of Currency Systems (2021)

Countries with a fully-fixed exchange rate:

  • Bahamas (fixed to US dollar)
  • Saudi Arabia (fixed to US dollar)
  • Denmark (fixed to the Euro)
  • Senegal (fixed to the Euro) – part of WAEMU
  • Nepal (fixed to a composite basket ofcurrencies)

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