Managed Currency

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Related to managed currencies: Pegged Currencies

Managed Currency

A currency with an exchange rate set or influenced by a government. 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 creates a managed currency. However, because most floating currencies manage their regimes with occasional central bank involvement, the term applies mainly to frequent or dramatic interventions. See also: 1994 Mexican economic crisis, Floating currency, Fixed exchange rate.
References in periodicals archive ?
In addition, since correlations of currencies with traditional investments are more favorable, showing lower and more stable correlations with equities, their research "suggests, partial allocation to managed currencies in multi-asset portfolios is especially effective in mitigating downside volatility and maximum drawdown."
Industry executives who deal with FX could be interested in a recently published new book, "The Money Makers" by historian Eric Rauchway, professor at the University of California, who described a monetary order based on the principles of managed currencies, and "Currency Politics," by Harvard University professor Jeffry Frieden.
Despite opinions on the future of Bitcoin, its existence and current growth is responsible to set a roadmap for success of other virtual currencies that may develop and become successful alternatives to government managed currencies. Due to the new nature of this concept, there is not a large amount of academic or professional literature relevant to Bitcoin.