A government-set price ratio between the currencies of one country and those of other countries, with fluctuations within certain limits.
Fixed is an exchange rate in which the exchange rate between one country’s currency and another country’s currency is basically fixed. Fixed exchange rate is not completely fixed, but fluctuates around the upper and lower limits of relatively fixed parity.
The highest point of the range is called the “upper limit” and the lowest point is called the “lower limit”.
When the exchange rate rises or falls to the upper or lower limit, the government central bank shall take measures to keep the exchange rate unchanged.
Fixed exchange rates were in place during the gold standard of the early 19th century to the 1930s and in a system centred from the Second World War to the early 1970s.
