What is a currency band?
A) a limit below which the currency is not allowed to fall
B) a limit above which the currency is not allowed to rise
C) a fixed rate regime with some small variations up or down allowed
D) a very rigid control of the currency-no variation allowed

Question

Quizplus · Accepted Answer

A currency band is a fixed rate regime where the exchange rate is allowed to vary slightly up or down within certain pre-determined limits. The upper and lower limits set by the government or central bank determines the level of fluctuation allowed in the exchange rate. This system offers some stability to the currency without completely fixing the exchange rate.

What Is a Currency Band