dirty float

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Dirty float

A system of floating exchange rates in which a government may intervene to change the direction of the value of the country's currency.

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.

dirty float

see FLOATING EXCHANGE RATE SYSTEM.

dirty float

the manipulation by the monetary authorities of a country's EXCHANGE RATE under a FLOATING EXCHANGE-RATE SYSTEM, primarily in order to gain a competitive advantage over trade partners. Thus, the authorities could intervene in the FOREIGN EXCHANGE MARKET to stop the exchange rate from otherwise appreciating (see APPRECIATION 1) in the face of market forces or, alternatively, they could deliberately engineer a DEPRECIATION of the exchange rate. See BEGGAR-MYNEIGHBOUR POLICY.
References in periodicals archive ?
We also need to adopt a managed float regime to manage our exchange rate.
During the tenure of Pakistan Muslim League (N) government from 2013 to 18, finance minister Ishaq Dar's obsession with keeping the rupee "at a hundred to the dollar" - dubbed Darnomics in the local Press - meant the adoption of a managed float regime which allowed the currency to oscillate between the Rs98 and Rs102 range.
From managed float regime, it had become a fixed rate regime which caused drop in exports and remittances.
For example: they do not like the way your currency is overvalued by about 20% via a managed float regime. A managed float regime (or dirty float) is a complex bit of high finance jargon which describes a system of economic management where Ishaq Dar yells at enough people so that, economically, things look good.
The mechanism replaced CBE's previous practice of a managed float regime. The statement also warned that foreign reserves have reached critical levels.
It is implausible to expect that the new managed float regime will be in place for only the short term.
While our forecast does not take into account the latest move by the Chinese authorities to reform their exchange rate regime, we expect the slight appreciation of 2 per cent against the US dollar and the shift from a fixed exchange rate regime to a managed float regime, where the renminbi is bounded between a tight band of 0.3 per cent, to have only minimal effect on the real economy, reducing inflationary pressure and cutting growth by no more than 1/4 per cent.
The Pakistan Muslim League-Nawaz's managed float regime kept the rupee overpriced throughout its tenure.
The International Monetary Fund last year pointed out that the currency which operates under a managed float regime was overvalued by as much as 20 percent and hurting its exports.

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