Which country is traditionally pegged to the US dollar?

Study for the BAFT Certificate in Principles of Payments Test. Utilize flashcards and multiple-choice questions, with hints and explanations for each query. Prepare thoroughly for your exam!

Jordan is traditionally pegged to the US dollar, meaning that its currency value is directly tied to the value of the US dollar. This pegging helps stabilize the Jordanian dinar, making it easier for trade and investment by providing certainty regarding exchange rate fluctuations. Such arrangements are often implemented by countries to manage their economic influences, particularly in regions where external economic pressures might be significant.

The other countries mentioned have varying monetary policies. Germany, as part of the Eurozone, uses the euro, which is influenced by many factors including its member countries' economies rather than being pegged to the US dollar. Similarly, France, another eurozone member, shares this characteristic, and Italy operates under the same system. Therefore, they do not have a fixed exchange rate to the US dollar like Jordan does.

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