Inflation vs. Deflation: What’s the Difference?

When the price of goods and services rises, inflation occurs. Similarly, when the price of goods and services falls, deflation occurs. The delicate balance between these two economic conditions, which are opposite sides of the same coin, is difficult to maintain, and an economy can quickly shift from one to the other. Central banks keep … Read more

Why Countries Peg Their Currency to the Dollar

A dollar peg occurs when a country’s currency maintains a fixed exchange rate with the US dollar. The central bank of the country keeps track of the value of its currency, which rises and falls in tandem with the dollar. Because the dollar is based on a floating exchange rate, its value fluctuates. At least … Read more

What is Sovereign Debt?

Debt owed by a central government is known as “sovereign debt.” Government debt in foreign currency is issued by a country’s government for economic growth and development. Sovereign credit ratings, which help investors weigh risks when evaluating sovereign debt investments, can provide investors with reassurance about the stability of the issuing government. There are several … Read more