Soft Peg

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It is a method of retaining the value of a currency within a specific range against a reserve currency by making use of an exchange rate regime. However, there are other peg approaches as well such as the flexible peg and the hard peg. The basic difference between the soft peg and the hard peg is that the former permits for the limited flexibility in the monetary policy. The main focus is to permit the governments to deal with the fluctuations. The most known soft-pegged cryptocurrency is the Chinese Yuan that had been pegged to the Dollar from 1994 till 2005.

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