LONDON, Jan 15 (Reuters) - Morocco became the latest country to loosen its currency peg on Monday. It did so under the advice of the International Monetary Fund and hopes the dollar's current weakness will make it a smoother process than for those who have taken similar steps in recent years.
Pegs, where the value of one currency is fixed relative to another and then kept there using central bank currency reserves, are relatively rare these days among the bigger economies.
That is partly because of the 1997-2002 emerging market crises, which were exacerbated by the cost of clinging to such fixed exchange rates. The list below shows those who maintain pegs. EUROPE Denmark: A currency peg has been in place since the 1980s. Under the Exchange Rate Mechanism (ERM II) set up with the launch of the euro, Denmark agreed to keep the crown in a corridor of 2.25 percent either side of a central rate of 7.46038 crowns to the euro. In practice, it has kept it within 0.5 percent. Bulgaria: The lev is pegged at 1.95583 to the euro by the currency board, a regime that constrains its central banks ability to set interest rates. CIS: Pressure has mounted on fixed exchange rates in the nine-member bloc of ex-Soviet countries after Russia switched to a freely floating exchange rate in late 2014. Belarus, Kazakhstan and Azerbaijan followed suit in 2015 . Moldova and Kyrgyzstan already have a float, while Tajikistan has what it calls a regulated float, featuring some interventions. Turkmenistan: The manat has no official peg but has traded around 3.3500 to the U.S. dollar since a January 2015 devaluation. Uzbekistan: The IMF describes the sum exchange rate regime as a crawl-like arrangement. NORTH AFRICA & THE MIDDLE EAST Saudi Arabia: The worlds top oil exporter has a fixed exchange rate regime, with the riyal pegged at 3.75 to the dollar since 1986. Foreign exchange is predominantly earned by the government though oil sales, and the Saudi Arabian Monetary Agency (SAMA) provides the private sector with dollars, selling them to banks. The riyal came under pressure in the forward market when oil prices were at long-term lows in 2016 but has largely stabilized.
Kuwait: The dinar is pegged against an undisclosed basket of currencies, made up of major trading and financial partners, and the central bank declaring the exchange rate daily against the U.S. dollar. (IMF) Qatar: The riyal has been pegged at 3.64 to the U.S. dollar since 1980, with an upper limit of 3.6415 and a lower limit of 3.6385. It neared that limit last year when tensions erupted with Saudi Arabia and three other Arab States.
United Arab Emirates: The mid-point between the official buying and selling rates for the dirham has been 3.6725 to the U.S. dollar since November 1997, with the peg being made official in 2002. Bahrain: The dinar is pegged at 0.376 to the dollar. Oman: The country has maintained a peg of 0.3849 rial to the U.S. dollar since 1986. Egypt: Bowing to foreign currency shortage, Egypt devalued its pound in 2016 after it had weakened by more than 50 percent. It has since rebound sharply. Morocco: The dirham was pegged against a euro-dollar basket. The central bank reduced the euros weighting to 60 percent and lifted the dollars share to 40 percent in April 2016, but Monday's move gave it the flexibility to trade in a five percent range rather than a much tighter 0.6 percent one.
Algeria: The countrys dinar is managed against an undisclosed basket of major currencies. Lebanon: The pound is pegged at 1,507.5 to the dollar since 1993.
Tunisia: Described by the IMF as a "crawl-like arrangement." Last year, former Finance Minister Lamia Zribi said the central bank would reduce its interventions so that the dinar steadily declined in value, but it would prevent any dramatic slide. The central bank has denied any plans to liberalize the currency.
SUB-SAHARAN AFRICA Nigeria: Africa's top oil exporter runs a multiple exchange rate system, offering at least five different rates, with the official one standing at around 305 to the dollar. In April, it put in place an "Investors & Exporters FX Window," which allows investors and traders to swap nairas for dollars at market-determined rates, currently standing at around 360. The NAFEX or Nigerian Autonomous Foreign Exchange Rate Fixing is fixed daily and serves as a benchmark for derivatives such as forwards and futures. Angola: The continent's number two oil exporter has been the other major mover this year. Its dwindling foreign reserves prompted the central bank to pursue a more "flexible" exchange rate strategy at the start of the year, a move that saw the kwanza drop 10 percent almost immediately. It had been through a number of devaluations since 2015.
CFA franc region: The eight-nation West African CFA franc zone (comprising Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo) and the six-nation Central African CFA franc zone (Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea and Gabon) have their respective currencies pegged to the euro. Both are guaranteed by the French treasury and were pegged to the French franc before the euro. The two currencies are separate legal tenders, though, both CFA francs are pegged at 655.957 to the euro. Ethiopia: Africas biggest coffee producer has operated a carefully managed floating exchange rate regime since 1992 for the birr. The IMF has urged Ethiopia to make its exchange rate more flexible, though authorities are pursuing a path of gradual depreciation. The last big devaluation was in 2010 when the birr lost 16.7 percent of its value to the dollar. LATIN AMERICA Venezuela: Has three official rates for its bolivar, with the strongest official rate at 10 bolivars per dollar. However, strict currency controls have forced people onto the black market, on which a dollar can buy 137,000 bolivars, after the currency weakened around 35 percent last month alone. That fall in value combined with money printing by the central bank is behind what many analysts are measuring as hyperinflation.
Cuba: The Caribbean island has a dual monetary system since 1994 after the fall of the Soviet Union. The convertible peso (CUC) is pegged at 1 to the U.S. dollar and used in the tourism industry and foreign trade, while the peso (CUP) in which most wages are paid and local goods are priced in, is valued at a fraction of the greenbacks value. The government says it plans to unify the rates as part of planned reforms. Neither currency is legal tender outside the country. ASIA China: Following a devaluation of the yuan in August 2015, China's government has been trying to gradually shift to a less controlled currency that moves more freely. However, China's central bank still fixes an official rate for the yuan daily and maintains a number of measures that limit the amount of currency that can be taken out of the country.
Pakistan: In December, Pakistan loosened its grip on managed float with the central bank - the biggest player in the country's thinly traded foreign exchange market - withdrawing its support for the currency.
Hong Kong: The Hong Kong dollar is pegged at 7.8 to the U.S. dollar, but can trade between 7.75 and 7.85. The Hong Kong Monetary Authority (HKMA) is obliged to intervene when the currency hits 7.75 or 7.85 to keep the band intact. Singapore: Manages the Singapore dollar within an undisclosed currency band. In October, the Monetary Authority of Singapore said it would continue with a policy of a gradual appreciation of the nominal effective exchange rate. Vietnam: The central bank moved in 2016 from a fixed rate of 21,890 dong per dollar to setting a mid-point rate daily in a managed-stabilized arrangement. The currency has traded in a tight range for the past six months. (Sources: International Monetary Fund, World Bank, Bank of International Settlement, Reuters; Reporting by Karin Strohecker and Marc Jones, editing by Larry King)