How Tether price is fixed?

[ahmadakbari]

Tether price is always 1 dollar. How the price is fixed?
Tether is a cryptocurrency with a limited supply and it is different from fiat. Assume that all the coins are kept in the wallets and no one sell them. How can the price be fixed? Why the price is not determined by supply and demand?

[MadGamer]

It's supposedly backed by fiat. If there is 1M USDT in circulation, there is 1M USD in a bank account somewhere backing that USDT but nothing guarantee the stability of the price. In fact, I've seen the price decreasing once when Bitfinex (exchange that created Tether) had an issue with the bank they were dealing with and you can see the charts in CoinMarketCap as well.