Hard Peg Law and Legal Definition
Hard Peg is establishing a fixed exchange rate between one national currency, usually that of a small country and another national currency, usually that of an industrial power. One country, "pegs" the value of its currency to the value of another currency. This is commonly done by countries with a history of monetary instability. Historically, the US dollar had a hard peg to gold from 1946 to 1971, while other currencies in the developed world had a hard peg to the US dollar. The result of a hard peg is to eliminate control by the pegging nation and relying on the actions of the targeting nation.