Believe it or not, there was once a time that every currency was pegged to the US dollar. This one done by a process known as a fixed exchange rate system. In a fixed exchange rate system, the prices of currencies are set by governments and central banks, and do not rise and flow with market changes.
When this system changed, the virtual peg of currencies to the US dollar was removed, however, many currencies were still pegged to the dollar.
Currencies Pegged to the US Dollar
Florin
Bahamian Dollar
Bahraini dinar
Barbadian dollar
Belize Dollar
Cayman Islands dollar
Djibouti franc
East Caribbean Dollar
Nakfa
Jordanian dinar
Lebanese lira
Rufiyaa
Omani rial
Qatari riyal
Riyal
Bolivar
United Arab Emirates dirham
Chinese Renimbi (yuan)
Today, only a few of these currencies are still pegged to the US dollar. Since 1971, many governments decided that it may not be in their best interest to peg to the US dollar, and instead allow the market (forex) to decide exchange rates.
Chinese Currency Peg
The Chinese Renimbi, or yuan, remains as one of the most well-known currencies pegged to the US dollar. By keeping the price of the local currency worth roughly as much as the US dollar, the Chinese are able to encourage an active foreign trade with American businesses. Today, China and the United States are huge trading partners, thanks in part to this peg.