Currency crisis
A situation in which a state can no longer hold its exchange rate, and the rate collapses once reserves run out or the peg is abandoned.
How to read the number
Betting against a fixed rate is attractive because the risk is one-sided: a devaluation pays, while a surviving peg costs only the interest on the borrowing.
When the metric lies
Official assurances that the peg is untouchable are not information about the future — they are obligatory for the authorities right up to the day they abandon it.
Also known as: speculative attack on a peg