Managed Peg Exchange Rate (1 Viewer)

[sedrickhead]

Hey guys,
I'm just curious on what the advantages and disadvantages of a managed flexible peg exchange rate system are, I can't seem to find it on the internet anywhere.

Thanks

 

[GeorgeYLin]

They are very similar to the adv/disadvs of a fixed exchange rate, such as

+Governments and people engaging in trade have more certainty about the exchange rate
+Less speculation (although this is debatable)
-Government must hold large foreign exchange reserves
-Lack of free capital flows

 

[sedrickhead]

They are very similar to the adv/disadvs of a fixed exchange rate, such as

+Governments and people engaging in trade have more certainty about the exchange rate
+Less speculation (although this is debatable)
-Government must hold large foreign exchange reserves
-Lack of free capital flows

Thank you for your help.