Title: Dollar Peg: Definition, How It Works, Why It's Done
Headings: The Dollar Peg, How It Works and Why It's Done
World Economy Trade Policy
The Dollar Peg, How It Works and Why It's Done
Why Countries Peg Their Currency to the Dollar
How It Works
Example of a Fixed Exchange Rate
Why Countries Peg Their Currency to the Dollar
Key Takeaways
Article Sources

Content: Dollar Peg: Definition, How It Works, Why It's Done
World Economy Trade Policy
The Dollar Peg, How It Works and Why It's Done
Why Countries Peg Their Currency to the Dollar
•••
James Hardy / PhotoAlto
By
Full Bio
Follow
LinkedIn with Background
Linkedin
Kimberly Amadeo is an expert on U.S. and world economies and investing, with over 20 years of experience in economic analysis and business strategy. She is the President of the economic website World Money Watch. Read The Balance's editorial policies
Kimberly Amadeo
Updated May 06, 2020
A dollar peg is when a country maintains its currency's value at a fixed exchange rate to the U.S. dollar. The country's central bank controls the value of its currency so that it rises and falls along with the dollar. The dollar's value fluctuates because it’s on a floating exchange rate. At least 66 countries either peg their currency to the dollar or use the dollar as their legal tender. 1 ﻿ The dollar is so popular because it's the world's reserve currency. World leaders gave it that status at the 1944 Bretton Woods Agreement. 2 ﻿
The runner-up is the euro.