Managed float

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 ?
That managed float system limits volatility: The currency has remained confined between 6.1 and 7.1 yuan to the dollar for the last five years.
State banks often act on behalf of the PBoC in operations managed float currency regime.
The rupee's official exchange rate is supported by the central bank under a de facto managed float system and many analysts consider the currency to be overvalued.
The rupee's official exchange rate has previously been supported by the central bank under a de facto managed float system and many analysts consider the currency to be overvalued.
That is not a good sign, especially when forex reserves are small enough to prevent the State Bank from intervening in the market, which is the so-called managed float.
THE Central Bank of Nigeria (CBN), says it will continue to operate a managed float exchange rate regime to reduce the impact of continued volatility in the exchange rate on the economy.
The comments from the central bank head supported a controversial managed float of the naira, the local currency.
Never before has it been allowed to be so intrusive and abandon so precipitously the managed float of the dollar.
According to reports, the IMF now wants Pakistan to shift from a managed float to a market-based flexible exchange rate.
'This (fresh rupee depreciation) comes after news reports that Pakistan will be opting for a flexible exchange rate and abandon the existing managed float mechanism,' Topline Securities commented.
The National Bank reduced its policy rate by 25 basis points to 4.75 percent in May 2018 to support economic growth, and has maintained a managed float of the exchange rate.

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