What does PEG mean ?referring to the dollar?

Question

Paulson met with the top political and finance officials in Qatar, a day after he visited Saudi Arabia.

He said the weak dollar is not the only reason for high inflation in Gulf countries.

"The peg serves this country and the region well," Paulson said, referring to Qatar.

He cited the example of Kuwait, which de-pegged from the dollar a year ago and is still combatting inflation.

Kuwait was the first country in the six-member Gulf Cooperation Council, which includes Saudi Arabia, to shun its peg with the dollar by allowing the dinar to float against a basket of currencies. But other Gulf countries including Qatar and the booming United Arab Emirates are believed to be considering the move.

Answer 1

It is when a country ties it's currency to that of another country or countries.

Answer 2

Peg: To fix (a price) at a certain level or within a certain range.