From that justified by conditions in the domestic economy (exchange-rate overshooting)

The system of fixed rates has been criticized on the grounds of its inflexibility and the fact that

It places too much of the adjustment burden on the domestic economy. A middle course has been

proposed in the “moving parity,” “sliding parity,” “dynamic” or “crawling peg” idea. In the moving

parity, the par rate is automatically adjusted according to a moving average of past rates taken

over a number of months. Under the sliding parity, instead of the whole amount of a revaluation or

Devaluation taking place at once, it is spread in small percentages over a number of months, e.g. a

Per cent devaluation may be achieved by a monthly 0.2 per cent reduction for fifty months. This

System has the advantage that it is known and certain, while the monthly adjustment is too small to

cause excessive speculative flows. Under the crawling peg, the gradual adjustments in the exchange

rate are linked to the level of a country’s reserves rather than past exchange rates. Portugal followed

a “crawling peg” policy for the escudo for a period until 1990 during which it was devalued by

Per cent per month. The fixed exchange-rate regime that truly combines flexibility with stability

Had proved elusive.

Commentary and Notes to Text 9.7.1.3

To induce the adjustment — стимулировать регулирование