Interactive Dashboard

The Currency Peg Paradox

A fixed exchange rate locks one price but can't freeze every price in the economy. Explore the mechanics through interactive simulations and data.

01

Peg Market Simulator

Peg Market SimulatorPeg Stable

Drag the slider to simulate selling or buying pressure on the pegged currency

Exchange Rate (BGN/EUR)

1.9558

Pegged - unchanged

Foreign Reserves

100%

Adequate

Market Pressure

BuyingNeutralSelling

Exchange Rate History

02

Price vs. Exchange Rate

Price vs. Exchange Rate

The exchange rate stays flat while domestic prices climb. Toggle each inflation driver to see its effect.

Dual Chart: Peg (flat) vs CPI (climbing)

Total inflation: 52.7%Annual rate: 8.5%

Exchange Rate (Peg)

1.95583

BGN/EUR - Unchanged

Current CPI

152.7

Base 100 at peg start

Cumulative Inflation

52.7%

Over 60 months

03

Balassa-Samuelson Catch-Up

Balassa-Samuelson Flow

How productivity gains in tradable sectors drive up domestic prices under a fixed exchange rate. Tap each step to explore.

04

Arbitrage & Profit Loopholes

Arbitrage Loop

You have 1,000,000 BGN and want to exploit the peg for risk-free profit. Try each route.

The Infinite Counterparty

You

1,000,000 BGN

Central Bank

Infinite Counterparty

Always offers exactly 1.9558 BGN/EUR

Attempted routes: 0Profit found: 0 BGN