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Currency pegs are vulnerable to speculative attacks. https://en.wikipedia.org/wiki/Speculative_attack https://en.wikipedia.org/wiki/Speculative_attack
by lottin 5y ago
Currency pegs are vulnerable to speculative attacks.
https://en.wikipedia.org/wiki/Speculative_attack https://en.wikipedia.org/wiki/Speculative_attack
- Aperocky 5y agoChina has more than 3 trillion USD in reserves, which makes any speculative attack essentially financial suicide.
- imtringued 5y agoUsing a negative interest rate to reduce the miney supply is a much better idea than using a peg. To be fair you can do both. A negative interest rate is a speculators nightmare.
- rswail 5y agoI thought that because Singapore is primarily a market/port economy, having its currency pegged against a basket that covers the majority of its trade weightings would help it withstand dramatic movements in individual currency swap rates with the Singapore dollar.