Floating Currency

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Floating Currency

A currency whose value is determined by the free market. That is, the value of a floating currency changes constantly depending on the supply and demand for that currency, as well as the amount of the currency held in foreign reserves. An advantage to a floating currency is that it tends to be more economically efficient. However, floating exchange rates tend to be more volatile depending on the particular currency. A floating currency may undergo currency appreciation or currency depreciation, depending on market fluctuations. Most major currencies are floating currencies See also: Fixed exchange rate, Crawling peg, Managed float.

References in periodicals archive ?

Treasury Secretary Mnuchin saying that the dollar is "not a concern of mine," though he conceded that he believes in a strong dollar based on long-term fundamentals while affirming that he supports free floating currency markets.

Dollar weakness and cryptocurrencies have been a talking point in Davos

These large and persistent trade imbalances have developed because the floating currency arrangement is inherently unstable.

International Monetary Instability All Over Again

The report added that "the risks to investors posed by a floating currency, in which currency value is largely determined by the market, comes from the potential for investors playing the market to lose their capital, should the currency swing dramatically.

Egypt pound under fire as CBE shifts to remove limits on foreign currency transfers

As part of Egypt's reform programme, the CBE decided to move the EGP to a completely floating currency in November, which is now trading at its genuine exchange rate, noted the IMF.

Egypt: no pain, no gain

First, Macri's government abolished exchange-rate controls and moved Argentina to a floating currency regime, with the Argentine peso allowed to depreciate by 60% against the US dollar in 2016.

Macri's disappointing first year in Argentina

Egypt's "migration to a managed floating currency regime in the coming weeks is now more feasible," he said.

Egypt to get $2b Saudi deposit in IMF deal

The point is we have a floating currency and it would be good for exports.

Voters don't like being threatened - Farage

The point is we have a floating currency and it will be good for exports," he told the BBC.

Britain's authority within EU will rise after "In" vote -PM Cameron

Mexico has been one of the most orthodox adherents among emerging markets to IMF doctrine, such as a freely floating currency, and only Colombia and Poland have received similar credit lines.

IMF OKs New Two-Year $88B Flexible Credit Line For Mexico

Governor Raghuram Rajan is looking to revive plans for a freely floating currency.

Indian central bank said to be mulling plans for rupee convertibility

A 20 per cent move in a free floating currency is a six sigma black swan event that should happen only once in a billion years if the universe was run forward in time again.

The Swiss franc shock and euro crash

Without a freely floating currency, prices, wages and unemployment could fluctuate markedly, and that would create havoc for people and businesses, the Governor said, illustrating the point with a hypothetical scenario that examines what would have happened had the Bank tried to prevent the dollar from appreciating between 2005 and 2008.

Canada : Floating Loonie Essential to the Bank of Canada s Inflation-Targeting Regime, Says Governor Stephen S. Poloz