Managed float

(redirected from Managed Floating Exchange Rates)

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 ?
It adds much to our understanding of what determines the behaviour of real exchange rate, an issue which has been at the centre of economic policy discussions since the inception of managed floating exchange rates in Pakistan.
(1) Pakistan adopted a fixed exchange rate policy up to 1982 and a managed floating exchange rate policy afterwards.
One is to modify the structure of the International Monetary Fund (IMF) to oversee managed floating exchange rates and to serve as a central bank to central banks.

Full browser ?