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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Neighboring countries like India, Bangladesh, Sri Lanka, Afghanistan and Myanmar are already practicing managed floating exchange rate system.
He favoured a managed floating exchange rate regime but it should be linked with Real Effective Exchange Rate.
Then a managed floating exchange rate system was adopted in January 1982.
The gap between managed floating exchange rate and the purchasing power parity of the rupee widens.
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.
During this period Pakistan passed through different exchange rate regimes including fixed exchange rate, managed floating exchange rate, multiple exchange rate, dirty float 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.
Under its "managed floating exchange rate" the Central Bank of Iran's official dollar rate on Saturday was 10,880 rials, but the real amount it cost to buy a dollar at an exchange bureau was 13,380, 23 per cent more.
Many economists believe the rial, which is loosely pegged to major world currencies under a "managed floating exchange rate," has not been allowed to devalue in line with inflation and is overvalued by between 30 and 50 percent.
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.

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