Explain basket of currencies

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Reference no: EM132897592

After Bretton Woods, countries decided to peg (tie) their domestic currencies to the US dollar.

Why and when is it advantageous for some countries, to peg their currencies to a "basket of currencies" of their MAIN trading partners instead? What impact can be doing this have on business persons or businesses trying to do business with countries whose currencies are so pegged? What are the dynamics?

Reference no: EM132897592

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