Currency Regimes – Active and Passive Crawling Pegs

The passive crawl. To prevent a run on the US dollar reserves, the exchange rate was adjusted frequently (weekly or daily) to keep pace with the inflation rate. E.g. Brazil.

The active crawl: The exchange rate was pre-announced for the coming weeks with changes taking place in small steps. E.g. Argentina, Chile, and Uruguay.

Aim: to manipulate expectations of inflation.