What is a managed float exchange rate system?

Economics Exchange Rate Systems Questions



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What is a managed float exchange rate system?

A managed float exchange rate system is a type of exchange rate regime where the value of a country's currency is determined by market forces, but the central bank intervenes occasionally to influence the exchange rate. The central bank may buy or sell its own currency in the foreign exchange market to stabilize or manage the exchange rate. This system allows for some flexibility in the exchange rate, while still allowing the central bank to have some control over the currency's value.