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: 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. Twenty-five countries peg their currency to it. The 19 eurozone members use it as their currency. 3 ﻿
How It Works
A dollar peg uses a fixed exchange rate. A country's central bank promises to give you a fixed amount of its currency in return for a U.S. dollar. The country must have lots of dollars on hand to maintain this peg.