Floating Currency


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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.
References in periodicals archive ?
makes it easier for American businesses to sell goods in China and will help the Yuan evolve into a free floating currency.
Governor Raghuram Rajan is looking to revive plans for a freely floating currency.
A 20 per cent move in a free floating currency is a six sigma black swan event that should happen only once in a billion years if the universe was run forward in time again.
Without a freely floating currency, prices, wages and unemployment could fluctuate markedly, and that would create havoc for people and businesses, the Governor said, illustrating the point with a hypothetical scenario that examines what would have happened had the Bank tried to prevent the dollar from appreciating between 2005 and 2008.
Despite early successes, Samea failed to reap large scale benefits from these practices until 2003, when the government adopted its floating currency exchange rate policy.
The shift to a freer floating currency raised fears the pound could fall further or the government could impose more capital controls, prompting Egyptians to shift into the dollar when the market opened on Sunday.
That has worked well for three decades not least because with the exception of Saudi Arabia, no GCC state has had a big economy that could support an independent floating currency.
And the yuan is not an option on the grounds that the regulatory system in China is questionable and it is not a free floating currency.
It is far easier to manipulate a floating currency lower than to manipulate a fixed-exchange rate.
DAVOS, Jan 27, 2011 (TUR) -- Turkish Deputy Premier and State Minister for economy Ali Babacan has ruled out any government intervention to FX rates in Turkey, making clear that the government was determined to stick to floating currency regime.
The Government supports a floating currency, which has served our nation well as a shock absorber against global events for more than a quarter of a century," Swan said.
The floating currency exchange rate will help guide resources to the