<p>You need to define "pegged" and "collapses"...
Setting a fixed exchange rate is by controlling the local currency's amount of money</p>

<p>If the <em>economy</em> of currency X's owner goes bankrupt (a "collapse"), why would the Y currency owner continue to keep the attachment...?
Usually "pegging" currencies together is to a strong currency, like the US dollar</p>

<p>If the onwer of Y currency will keep attaching Y to X, it will create a local hyper inflation, and hurt its own economy... </p>

CC BY-SA 4.0
2018-11-03T06:39:34.630Z
2018-11-03T06:39:34.630Z
Guy Louzon
<p>If a currency X is pegged to another currency Y which collapses, what happens to currency X?</p>

CC BY-SA 4.0
2018-11-09T00:39:08.203Z
This question, as is, is a little too much of an open ended hypothetical to be very useful to other people on this site (see Guy's answer below).
Kitsune Cavalry
<currency>
If a currency is pegged to another currency which collapses, what happens?
Tom
# If a currency is pegged to another currency which collapses, what happens?

(Asked by: username_0 on 2018-11-03)

If a currency X is pegged to another currency Y which collapses, what happens to currency X?

**Tags:** currency
> **Comments:**
> **username_1**: This question, as is, is a little too much of an open ended hypothetical to be very useful to other people on this site (see Guy's answer below).  

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## 1 answers

### Answer by username_2 on 2018-11-03. Score: 2

You need to define "pegged" and "collapses"...
Setting a fixed exchange rate is by controlling the local currency's amount of money

If the *economy* of currency X's owner goes bankrupt (a "collapse"), why would the Y currency owner continue to keep the attachment...?
Usually "pegging" currencies together is to a strong currency, like the US dollar

If the onwer of Y currency will keep attaching Y to X, it will create a local hyper inflation, and hurt its own economy...


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