Managed float

(redirected from Managed Floating Exchange Rate)

Managed float

Also known as "dirty" float, this is a system of floating exchange rates with central bank intervention to reduce currency fluctuations.

Managed Float

A floating exchange rate in which a government intervenes at some frequency to change the direction of the float by buying or selling currencies. Often, the local government makes this intervention, but this is not always the case. For example, in 1994, the American government bought large quantities of Mexican pesos to stop the rapid loss of the peso's value.

Strictly speaking, even a central bank's intervention to raise or lower interest rates could be considered a managed float. However, because most floating currencies manage their regimes with occasional central bank involvement, the term applies mainly to frequent or dramatic interventions. A managed float is also known as a dirty float. See also: 1994 Mexican economic crisis, Floating currency, Fixed exchange rate.
References in periodicals archive ?
Several economists, including former Finance Minister Abdel-Rahim Hamdi, recently called on the government to give up the system of managed floating exchange rate and allow the market mechanisms to set the price of the pound.
China is implementing the managed floating exchange rate regime based on market demand and supply.
Broadly speaking, the exchange rate regimes include pegged or fixed exchange rate, managed floating exchange rate, and flexible exchange rate.
The Central Bank of Iran has, over the past decade, implemented a managed floating exchange rate system by which the rate was fixed through the injection of foreign exchange revenue, mostly generated from oil; however, during the last 18 months the weakening of the Rial has accelerated and in October the acceleration rate increased dramatically.
Thus, with a view to maintaining the competitiveness of exports and thereby to bring a sustainable balance between the country's current receipts and current payments, it was decided to adopt the managed floating exchange rate system with effect from 8th January 1982.
China in July 2005 freed the yuan from an 11-year-old peg to the dollar and moved to a tightly managed floating exchange rate.
Summary: CHINA moved into a managed floating exchange rate regime based on market demand and supply with reference to a basket of currencies on July 21, 2005.
Under the managed floating exchange rate mechanism, the yuan exchange rate could rise or fall, moving flexibly depending on economic conditions and international payment conditions," she said.
It marks the yuan's strongest level since China freed its currency from an 11-year-old peg in July 2005 and moved to a tightly managed floating exchange rate.
1994-96: a single and managed floating exchange rate regime based on market supply and demand.
In July, China abandoned its eight-year peg to the dollar and move to a managed floating exchange rate regime, leading the yuan to ''appreciate, though slightly, against the dollar since then,'' the department said.
That fixed peg, which had been in place since 1996, was cancelled abruptly in late July, though the new system adopted by Chinese leaders is far from free-floating But the announcement by the People's Bank of China was accompanied by a slight increase in the yuan's value and a pledge to "move into a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies.

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