What is the difference between a floating exchange rate, a soft peg, a hard peg, and dollarization?

The difference between a floating exchange rate, a soft peg, a hard peg, and dollarization is as follows: - Floating exchange rate: The currency's value fluctuates according to market forces, such as the US Dollar, Euro, and Japanese Yen. - Soft peg: The currency's value is fixed to another currency or a basket of currencies within a narrow band, allowing for some flexibility. An example is China's Yuan. - Hard peg: The currency's value is fixed to another currency or a basket of currencies, and the central bank actively maintains the fixed rate, such as Hong Kong's Dollar pegged to the US Dollar. - Dollarization: A country adopts another country's currency as its official currency (official) or widely uses it alongside its domestic currency (unofficial), such as El Salvador adopting the US Dollar, and Zimbabwe's unofficial use of the US Dollar.