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China's Currency Peg: CNBC Explains

Sunday, 29 May 2011 | 12:00 AM ET

Countries around the world keep their currencies pegged to the U.S. dollar, but how is this balance maintained? It's a simple case of supply and demand, says Salman Khan of the Khan Academy. Learn how the Chinese Central Bank has traditionally pegged the yuan to the dollar and, in the process, maintained a trade imbalance.