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Floating Currency
(redirected from Floating Currencies)

   Also found in: Wikipedia 0.01 sec.
Floating Currency
A currency whose value is determined by the free market. That is, the value of a floating currency changes constantly depending on the supply and demand for that currency, as well as the amount of the currency held in foreign reserves. An advantage to a floating currency is that it tends to be more economically efficient. However, floating exchange rates tend to be more volatile depending on the particular currency. A floating currency may undergo currency appreciation or currency depreciation, depending on market fluctuations. Most major currencies are floating currencies See also: Fixed exchange rate, Crawling peg, Managed float.


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And floating and fixed exchange-rate regimes coexist uneasily, because volatility tends to affect the floating currencies (often the euro, and recently the Latin American currencies).
Canadian Finance Minister Jim Flaherty said on Monday that he expected to see a "gradual increase" in the value of the Chinese currency said in remarks reported on Monday that bickering that the world needed a new regime to succeed the "Bretton Woods II" system of floating currencies, which has been in place since the fixed-rate system linked to gold broke down in 1971.
Writing in the Financial Times, Robert Zoellick said a "Bretton Woods II" system of floating currencies was needed to replace the Bretton Woods fixed-exchange rate regime that broke down in the early 1970s.
 
 
 
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