Currency band

Short description: Range of values for the exchange rate

This page is about exchange rates. For the currency packaging device, see Currency strap.

Foreign exchange

Exchange rates

* Currency band
* Exchange rate
* Exchange-rate regime
* Exchange-rate flexibility
* Dollarization
* Fixed exchange rate
* Floating exchange rate
* Linked exchange rate
* Managed float regime
* Dual exchange rate

Markets

* Foreign exchange market
* Futures exchange
* Retail foreign exchange trading

Assets

* Currency
* Currency future
* Non-deliverable forward
* Foreign exchange swap
* Currency swap
* Foreign exchange option

Historical agreements

* Smithsonian Agreement
* Plaza Accord
* Louvre Accord

See also

* Bureau de change
* Hard currency
* Currency pair
* Foreign exchange fraud
* Currency intervention

* v
* t
* e

A currency band is a range of values for the exchange rate for a country’s currency which the country’s central bank acts to keep the exchange rate within.[citation needed]

The central bank selects a range, or "band", of values at which to set their currency, and will intervene in the market or return to a fixed exchange rate if the value of their currency shifts outside this band. This allows for some revaluation, but tends to stabilize the currency's value within the band. In this sense, it is a compromise between a fixed (or "pegged") exchange rate and a floating exchange rate.[1]

For example, the exchange rate of the renminbi of the mainland of the People's Republic of China has been based upon a currency band;[2] the European Economic Community's "snake in the tunnel" was a similar concept that failed, but ultimately led to the establishment of the European Exchange Rate Mechanism (ERM) and ultimately the Euro.

## See also

* Currency board

## References

1. ↑ "Investopedia Currency Band Definition"
2. ↑ China Vows Wider Yuan Movement April 18, 2013 Wall Street Journal

0.00

(0 votes)

Original source: https://en.wikipedia.org/wiki/Currency band. Read more

|

Retrieved from "https://handwiki.org/wiki/index.php?title=Finance:Currency_band&oldid=3849637"
*[v]: View this template
*[t]: Discuss this template
*[e]: Edit this template