Characteristics of Pegged Exchange Rate Regimes

In the context of international economics, countries can adopt different exchange rate regimes which influence their monetary policy effectiveness and economic stability. Understanding these regimes is crucial for evaluating their impact on inflation rates, trade balances, and overall economic performance. The three primary regimes include fixed, floating, and pegged exchange rate systems. Each of these systems has distinct mechanisms and implications for currency value and economic strategy. Considering this background, which of the following statements most accurately describes a characteristic of a pegged exchange rate regime?