Managed float

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 ?
Analysts say Pakistan's central bank effectively sets the currency rate as it is the biggest player in the thinly traded rupee market and controls what is widely understood to be a managed float system.
From managed float regime, it had become a fixed rate regime which caused drop in exports and remittances.
For example: they do not like the way your currency is overvalued by about 20% via a managed float regime.
The State Bank of Pakistan's (SBP) withdrawal of support for the rupee was widely seen as a devaluation measure since the central bank is the most influential player in the thinly traded local foreign exchange market and controls what is widely considered a managed float system.
The State Bank of Pakistan's withdrawal of its support for the rupee was seen as a devaluation measure as the central bank is the biggest player in the thinly traded local foreign exchange market and controls what is widely considered a managed float system.
The currency, which is part of a managed float, has largely been stable.
Once the foreign exchange market is unified, the CBI's intention is to move to a managed float system which ena- bles a market-based and modern exchange rate mechanism with higher flexibility.
If the CBE opts for a managed float of the pound they will take certain steps to mitigate the cost of the devaluation.
The Central Bank of Azerbaijan (CBA) moved to a managed float exchange rate regime and appropriately raised interest rates in 2016 to address rising inflation", said in report.
The central bank, which keeps the dinar in a managed float versus the euro, began selling as the dinar traded at a rate of around 123.
The medium-term choices for the GCC countries could be a move towards a managed float, which has the advantage of allowing them use monetary policy to smooth business cycles, or peg to a basket that includes oil price, which does not require autonomous monetary policy and would ensure that the GCC currencies generally move with the global price of oil while dampening the volatility associated with a pure oil peg.
MARC also notes that the managed float pricing system which was implemented in December 2014 has had no material impact on PDB's profitability as the new system has removed the subsidy component from the automatic pricing mechanism.

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