Could someone please explain how a fixed exchange rate is maintained? Is it just via regulation, or are currency interventions via monetary policy, using central bank currency reserves also required? If the latter option is true, then what differentiates a fixed exchange rate system from that of a managed float? Could someone give examples of countries under a fixed exchange rate and managed float systems?
I’m currently going through my economics notes, and am uncertain about the main differences. For example, can we use a currency equalisation diagram (basically a buffer stack equivalent for currencies) to explain managed float of a fixed currency rate?
Thanks.