Managed float

(redirected from Managed Floats)

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 ?
They come in many varieties: crawling pegs, adjustable pegs, bands, managed floats, and more.
In particular, Jordan, Lebanon, and Morocco have conventional fixed pegs; Tunisia has a crawling peg and Egypt and Iran have managed floats.
In addition, China and Vietnam have officially adopted a type of managed float known as a "crawling peg"--that typically includes either the gradual appreciation or depreciation of the currency over time against one or more currencies.
This has led some analysts to assert that China and Vietnam have abandoned the crawling peg in favor of either a pegged exchange rate or a managed float.
dollar over the last four years--the Philippine peso and the Thai baht--also have fluctuated along comparable trend lines since July 2005, possibly indicating that the managed float baht was following the lead of the free floating peso.
De Facto Exchange Rates Policies of East Asia (as of April 30, 2008) Economy Exchange Rate Policy Cambodia Managed Float China Crawling Peg * Hong Kong Pegged Indonesia Managed Float Japan Free Float Laos Managed Float Macau Pegged Malaysia Managed Float Philippines Free Float Singapore Managed Float South Korea Free Float Taiwan Managed Float Thailand Managed Float Vietnam Crawling Peg * Source: International Monetary Fund, De Facto Classification of Exchange Rate Regimes and Monetary Policy Framework, http://www.
In addition, some nations, such as China and Vietnam, have adopted a type of managed float known as a "crawling peg"--that typically includes either the gradual appreciation or depreciation of the currency over time against one or more currencies.
The two currencies that appreciated the most--the free-floating Philippino peso and the managed float Thai bhat--both rose about 23% in value between June 2005 and March 2008, but moved somewhat independently throughout the period.
14) The remaining currencies--which followed a managed float or crawling peg exchange rate--either exhibited a fairly smooth rise in value or comparatively limited intertemporal variations.

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