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floating exchange rate
(redirected from Floating exchange rates)

    Also found in: Wikipedia 0.02 sec.
Floating exchange rate
A country's decision to allow its currency value to change freely. The currency is not constrained by central bank intervention and does not have to maintain its relationship with another currency in a narrow band. The currency value is determined by trading in the foreign exchange market.
floating exchange rate
An exchange rate between two currencies that is allowed to fluctuate with the market forces of supply and demand. Floating exchange rates tend to result in uncertainty as to the future rate at which currencies will exchange. This uncertainty is responsible for the increased popularity of forward, futures, and option contracts on foreign currencies. Also called flexible exchange rate. Compare fixed exchange rate.


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Also known as "dirty" float, this is a system of floating exchange rates with central bank intervention to reduce currency fluctuations.
AF & PA pleased with currency prospects by Solutions - for People, Processes and Paper
Thus, floating exchange rates change freely and are determined by trading in the foreign-exchange market.
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The proposal carries the best advantages of both fixed and floating exchange rates.
Iraq's currency solution: the importance of adding oil to the equation by Frankel, Jeffrey / The International Economy
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