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⭐ Core Definition: Fixed exchange-rate system

A fixed exchange rate, often called a pegged exchange rate or pegging, is a type of exchange rate regime in which a currency's value is fixed, or pegged, by a monetary authority against the value of another currency, a basket of other currencies, or another measure of value, such as gold or silver.

There are benefits and risks to using a fixed exchange rate system. A fixed exchange rate is typically used to stabilize the exchange rate of a currency by directly fixing its value in a predetermined ratio to a different, more stable, or more internationally prevalent currency (or currencies) to which the currency is pegged. In doing so, the exchange rate between the currency and its peg does not change based on market conditions, unlike in a floating (flexible) exchange regime. This makes trade and investments between the two currency areas easier and more predictable and is especially useful for small economies that borrow primarily in foreign currency and in which external trade forms a large part of their GDP.

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👉 Fixed exchange-rate system in the context of Devaluation

In macroeconomics and modern monetary policy, a devaluation is an official lowering of the value of a country's currency within a fixed exchange-rate system, in which a monetary authority formally sets a lower exchange rate of the national currency in relation to a foreign reference currency or currency basket. The opposite of devaluation, a change in the exchange rate making the domestic currency more expensive, is called a revaluation. A monetary authority (e.g., a central bank) maintains a fixed value of its currency by being ready to buy or sell foreign currency with the domestic currency at a stated rate; a devaluation is an indication that the monetary authority will buy and sell foreign currency at a lower rate.

However, under a floating exchange rate system (in which exchange rates are determined by market forces acting on the foreign exchange market, and not by government or central bank policy actions), a decrease in a currency's value relative to other major currency benchmarks is instead called depreciation; likewise, an increase in the currency's value is called appreciation.

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⭐ Core Definition: Fixed exchange-rate system
👉 Fixed exchange-rate system in the context of Devaluation
Fixed exchange-rate system in the context of Overseas collectivity

Fixed exchange-rate system in the context of Overseas collectivity

In France, an overseas collectivity (French: collectivité d'outre-mer, abbreviated as COM) is a first-order administrative division, on the same level as its regions, but have a semi-autonomous status. The COMs include some former French overseas colonies and other overseas entities with a particular status, all of which became COMs by constitutional reform on 28 March 2003. The COMs differ from overseas regions and overseas departments, which have the same status as metropolitan France but are located outside Europe.As integral parts of France, overseas collectivities are represented in the National Assembly, Senate and Economic and Social Council. Though some are outside the European Union, all can vote to elect members of the European Parliament (MEPs). (All of France became one multi-member EU constituency in 2019.) The Pacific COMs use the CFP franc, a currency pegged to the euro, whereas the Atlantic COMs use the euro itself. As of 31 March 2011, there were five COMs:

French Polynesia became a COM in 2003. Its statutory law of 27 February 2004 gives it the designation of overseas country inside the Republic (French: pays d'outre-mer au sein de la République, or POM), but without legal modification of its status. French Polynesia has a great degree of autonomy, two symbolic manifestations of which are the title of the President of French Polynesia (Le président de la Polynésie française) and its additional designation as a pays d'outre-mer. The legislature is the Assembly of French Polynesia since 2004.
Saint Barthélemy, an island in the Lesser Antilles. St. Barthelemy was separated from the overseas department of Guadeloupe in 2007. It has a territorial council and executive council, and in 2012 ceased to be part of the European Union.
Saint Martin, the northern part of the island of Saint Martin in the Lesser Antilles. St. Martin was separated from the overseas department of Guadeloupe in 2007. It has a territorial council and executive council, and with separation remained a part of the European Union.
Saint Pierre and Miquelon, a group of islands in the Atlantic Ocean off the coast of Newfoundland, Canada. It has a territorial council. It is the last remaining part of New France to be under French rule.
Wallis and Futuna, three small islands in the Pacific Ocean has a high administrator and territorial assembly.

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Fixed exchange-rate system in the context of "Devaluation"

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⭐ Core Definition: Fixed exchange-rate system

👉 Fixed exchange-rate system in the context of Devaluation

Fixed exchange-rate system in the context of Overseas collectivity