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Floating Exchange Rate System

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Floating exchange rate system
Purchase or sale of the currencies of other nations by a central bank for the purpose of influencing foreign exchange rates or maintaining orderly foreign exchange markets. Also called foreign-exchange market intervention.
Floating Exchange Rate System
The practice in which a central bank buys and sells one or more foreign currencies in order to affect the exchange rate of its own currency. To give a very simple example, if a central bank believes its own currency is overvalued, it may buy other currencies on the open market to increase demand and therefore the price of these currencies. The extra demand will likely drive down the exchange rate of its own currency to a lower level.
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INTRODUCTION The uncertainty of the exchange rate in Korea, which has a small open economy that shows a tendency to be dependent on foreign countries, has been sharply increased due to the increase in the volatility of the exchange rate by the regime shifts such as execution of the free floating exchange rate system and foreign exchange and capital account liberalization since the currency crisis of December, 1997.
The volatility and asymmetry of Won/Dollar exchange rate by Yoon, Seok; Lee, Ki Seong / Journal of Social Sciences
The release of the ACU can be seen as an initial step toward the integration of Asian currencies just as the European currency unit, a similar floating exchange rate system adopted in 1979 at the start of the European Monetary System, was replaced with the euro in 1999, it said.
ADB eyes unveiling ACU average around March: report by Asian Economic News
He believes such a regime allows developing countries to capture the best features of both the fixed and floating exchange rate systems.
"Economic Globalization and Asia" by DiPietro, William R. / Indian Journal of Economics and Business
 
 
 
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