Pegging until the end is a dangerous practice. A high peg can result in a high rate of inflation and can create serious problems with a country's ability to pay its debts. As a result, a pegged currency may lead to a decline in the home currency and a decline in the economy. To prevent this from happening, the government must spend its foreign exchange reserves to protect the peg, and over time, the reserves will run out and the peg will collapse..