Free or pegged

If a currency is free-floating, its exchange rate is allowed to vary against

that of other currencies and is determined by the market forces of supply

and demand. Exchange rates for such currencies are likely to change

almost constantly as quoted on financial markets, mainly by banks, around

the world. A movable or adjustable peg system is a system of fixed

exchange rates, but with a provision for the devaluation of a currency. For

example, between 1994 and 2005, the Chinese yuan renminbi (RMB)

was pegged to the United States Dollars at RMB 8.2768 to $1. China

was not the only country to do this; from the end of World War II until

1966, Western European countries all maintained fixed exchange rates

with the US dollar based on the Bretton Woods system.