The 5 Major Currencies Pegged to the US Dollar

If you track the exchange rate of the US Dollar to the Euro, you’ll see the number change every single second. But if you try to track the US Dollar to the UAE Dirham, the chart looks broken. It never moves. It has sat perfectly at 3.6725 for nearly 30 years.

This is because the Dirham is pegged to the Dollar. A currency peg is a government policy where a central bank legally mandates that its national currency will always hold a fixed value relative to another major currency (usually the USD).

Why peg to the US Dollar?

The US Dollar is the world's reserve currency. The vast majority of global trade, particularly the sale of commodities like oil and gold, is conducted in USD. By pegging their currency to the Dollar, a country instantly gains stability, makes itself highly attractive to foreign investors, and simplifies international trade.

Here are the 5 most notable global currencies that are pegged to the US Dollar.

1. The UAE Dirham (AED)

Peg Rate: $1 USD = 3.6725 AED

The United Arab Emirates has officially pegged its Dirham to the Dollar since 1997. Because the UAE’s economy was historically dominated by oil exports (which are priced in dollars), the peg shielded the government's revenue from wild currency fluctuations. Today, it provides a bedrock of financial stability that has helped turn Dubai into a global financial and real estate hub.

2. The Saudi Riyal (SAR)

Peg Rate: $1 USD = 3.75 SAR

Similar to the UAE, Saudi Arabia relies heavily on the export of crude oil. By pegging the Riyal to the Dollar in 1986, the Saudi government ensured that their massive oil revenues were highly predictable. To maintain this peg, the Saudi Central Bank holds hundreds of billions of dollars in foreign reserves.

3. The Hong Kong Dollar (HKD)

Peg Rate: $1 USD = ~7.80 HKD (Trading Band)

Unlike the Middle Eastern pegs, the Hong Kong Dollar uses a "Linked Exchange Rate System." It is not locked to one exact decimal, but rather it is allowed to float within a very tight, legally enforced band between 7.75 and 7.85 HKD per USD. This peg is crucial to Hong Kong's survival as a global financial center, as it essentially eliminates currency risk for international banks operating in the city.

4. The Qatari Riyal (QAR)

Peg Rate: $1 USD = 3.64 QAR

Qatar is one of the world's largest exporters of Liquefied Natural Gas (LNG). Following the standard playbook of the Gulf Cooperation Council (GCC), they pegged their currency to the Dollar in 2001 to stabilize their export revenues and control domestic inflation.

5. The Panamanian Balboa (PAB)

Peg Rate: $1 USD = 1.00 PAB (1:1)

Panama has a very unique relationship with the US Dollar. The Balboa is pegged at exactly 1:1, but Panama actually uses US Dollar bills for all of its paper currency! The country only mints its own coins. This system has been in place since 1904, making it one of the oldest currency pegs in the world.