A small country imports most of all its consumption goods from overseas: 70% of them are from the US and 30% from China. If the country wants to minimise inflation caused by exchange rate fluctuation, then it should _____________.

let its currency to freely float

peg its currency against the Chinese yuan

peg its currency against a basket of currencies that includes both the US$ and Chinese yuan

Unknown -- because we do not know which countries are its main export destinations.

peg its currency against the US dollar