<p>Central bank of the country just declares that it will exchange local money for the foreign money at fixed exchange rate. You can just look up definition of <a href="https://www.investopedia.com/terms/c/currency-peg.asp" rel="nofollow noreferrer">currency peg</a>.</p>

CC BY-SA 4.0
2021-03-08T23:33:51.170Z
Belize operates exchange controls so it is not quite as simple as that
Henry
CC BY-SA 4.0
2021-03-14T15:58:32.500Z
Right; if lots of people convert their B\$ into US\$ then the central bank will run out of US\$, so the central bank limits this transaction.
Daniel
CC BY-SA 4.0
2021-03-08T22:59:31.797Z
2021-03-08T22:59:31.797Z
WilliamT
<p>For example, Belize has pegged its currency to the US dollar at an exchange rate of 2 Belize dollars to 1 US dollar. How does Belize do that?</p>

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2021-03-08T22:21:11.047Z
Welcome to Economics:SE. Thank you for your question; please consider revising it to be more in line with our community expectations. Like many other stacks, [we expect questions to provide evidence of prior research](https://economics.stackexchange.com/help/how-to-ask). That helps us to understand the question, and avoids our repeating work you've already done. Our [help center](https://economics.stackexchange.com/help), and [other stacks](https://interpersonal.meta.stackexchange.com/questions/3224/how-do-i-write-a-good-question) provide additional resources to assist with revisions.
1muflon1
CC BY-SA 4.0
2021-03-09T23:27:05.090Z
If you look over history, currency pegs of various types were the norm, e.g., the Bretton Woods system, Gold Standard, and then the euro and its predecessors (ERM). Each one has its own institutions. If you are interested in Belize in particular, you might as well start searching on your own, with the central bank being a likely source of information.
Brian Romanchuk
<macroeconomics><currency><foreign-exchange><nonexpert>
How does one country peg its currency to another's?
Bear Bile Farming is Torture
# How does one country peg its currency to another's?

(Asked by: username_0 on 2021-03-08)

For example, Belize has pegged its currency to the US dollar at an exchange rate of 2 Belize dollars to 1 US dollar. How does Belize do that?

**Tags:** macroeconomics, currency, foreign-exchange, nonexpert

> **Comments:**
> **username_1**: Welcome to Economics:SE. Thank you for your question; please consider revising it to be more in line with our community expectations. Like many other stacks, [we expect questions to provide evidence of prior research](https://economics.stackexchange.com/help/how-to-ask). That helps us to understand the question, and avoids our repeating work you've already done. Our [help center](https://economics.stackexchange.com/help), and [other stacks](https://interpersonal.meta.stackexchange.com/questions/3224/how-do-i-write-a-good-question) provide additional resources to assist with revisions.  
> **username_2**: If you look over history, currency pegs of various types were the norm, e.g., the Bretton Woods system, Gold Standard, and then the euro and its predecessors (ERM). Each one has its own institutions. If you are interested in Belize in particular, you might as well start searching on your own, with the central bank being a likely source of information.  

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## 1 answers

### Answer by username_3 on 2021-03-08. Score: 1

Central bank of the country just declares that it will exchange local money for the foreign money at fixed exchange rate. You can just look up definition of [currency peg](https://www.investopedia.com/terms/c/currency-peg.asp).

> **Comments:**
> **username_4**: Belize operates exchange controls so it is not quite as simple as that  
> **username_5**: Right; if lots of people convert their B\$ into US\$ then the central bank will run out of US\$, so the central bank limits this transaction.  

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