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Linked exchange rate system

forexLinked exchange rate system is a type of currency exchange system in which one currency rate is linked with another currency rate.The main objective of implementing this system is to stabilize the currency market and exchange rate of the country.It also creates a stable environment for the Forex traders.

 

The linked exchange rate system is totally different from the fixed exchange rate system,as government is not allowed to influence of the currency market in this system.Linked exchange rate system is successfully being used in Honk Kong since 1983.It was introduced in the country to save the country from financial disaster and turmoil.Under this exchange rate regime Hong Kong dollar was linked with the US Dollar.

 

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About Emaad Qureshi