Fixed exchange rate system facts for kids
In a fixed exchange rate, a state authority defines an exchange rate of its own currency, against another currency, a basket of currencies, or some good, such as gold. The central bank of the country will then guarantee this exchange rate; it will buy or sell its currency at this rate.
Related pages
Images for kids
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Fig.1: Mechanism of fixed exchange-rate system
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Fig.2: Excess demand for dollars
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Fig.3: Excess supply of dollars
See also
In Spanish: Tipo de cambio fijo para niños
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Fixed exchange rate system Facts for Kids. Kiddle Encyclopedia.