Managed float


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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 ?
The price of the widely used RON95 grade of petrol and diesel will be fixed according to an automatic managed float -- a system that adjusts prices according to the market rate, the same mechanism as for the price of premium petrol RON97, the Domestic Trade, Cooperatives and Consumerism Minister Hasan Malek said.
Since its start in March 2011, President Thein Sein s administration has been committed to economic reform such as transforming the country s exchange rate system from the fixed exchange rate system to a managed float system and promoting trade liberalization, and has made efforts toward democratization, strengthening of the rule of law and national reconciliation.
Kazakhstan's tightly managed float was undermined by Russia allowing the rouble to slide amid a broader retreat from emerging market currencies sparked by the scaling back of US monetary stimulus.
On April 2, 2012, Myanmar's reform government implemented a managed float for the MMK, in place of the "overvalued" peg.
He said a degree of volatility between the riyal and many Asian currencies is the result of exchange rate policies based on a free or managed float in many Asian economies.
In an initial move, on 2 April 2012, Myanmar's central bank moved from a fixed exchange rate policy to a managed float, setting a reference rate of 818 kyat to the US dollar.
The mechanism replaced CBE's previous practice of a managed float regime.
The currency, subject to managed float, has weakened 1.
The Egyptian pound, subject to a managed float, strengthened 0.
The main impediment would be the lack of economic diversification within the union, leading to greater exchange rate volatility than under a managed float.
Myanmar earlier this month unshackled its kyat currency from government controls with the introduction of a managed float for the exchange rate.
The Malaysian ringgit is a managed float and has risen 20 per cent against the dollar since the failure of Lehman.

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