The Central Bank of Malaysia decides to peg the Malaysian Ri…

The Central Bank of Malaysia decides to peg the Malaysian Ringgit to the Singapore Dollar to stabilize its currency’s value in international markets. However, instead of fixing it at a single rate, they allow the Ringgit to fluctuate within a band of ±1% from the pegged rate. This means if the Singapore Dollar is at SGD 1 = MYR 3.00, the Ringgit can move between 2.97 and 3.03 against the Singapore Dollar. Question: Which of the following scenarios best illustrates a soft peg exchange rate regime?