A floating exchange rate is a type of exchange rate regime wherein a currency's value is allowed to fluctuate according to the foreign exchange market. A currency that uses a floating exchange rate is known as a floating currency. The opposite of a floating exchange rate is a fixed exchange rate. The exchange rate regime is the way a country manages its currency in respect to foreign currencies and the foreign exchange market. ... The Currency Market or Foreign Exchange Market is the market where one currency is traded for another. ... A floating currency is a currency that uses a floating exchange rate as its exchange rate regime. ... A fixed exchange rate, sometimes (less commonly) called a pegged exchange rate, is a type of exchange rate regime wherein a currencys value is matched to the value of another single currency (most often the US Dollar), to a basket of other currencies, or to another measure of value...
Economists generally think that, in most circumstances, floating exchange rates are preferable to fixed exchange rates because floating rates are responsive to the foreign exchangemarket. However, in certain situations, fixed exchange rates may be preferable for their greater stability. An economist is someone who studies Economics. ... In the foreign exchange market, the currency traders goal is to earn as much profit as possible as a result of purchasing and selling foreign currencies. ... Chichicastenango, Guatemala traditional market Market stall in internally displaced persons camp in Kitgum, northern Uganda Mercado dos Lavradores, Funchal (Madeira Islands) A market is a mechanism which allows people to trade, normally governed by the theory of supply and demand. ...
There is no currency in the world for which its value is absolutely determined by the foreign exchange market; in cases of extreme appreciation or depreciation, the central bank will intervene to stabilize the currency. Thus, the exchange rate regimes of floating currencies may more technically be known as a managed float.
External links
Foreign Market Watch (http://www.foreignmarketwatch.com/index.shtml) Analysis and Commentary on the major currency pairs
Managed care is the provision of health care at a fixed rate per period (the premium) plus occasional small co-payments when specific medical services (e.g., prescriptions) are provided, primarily by a health maintenance organizations (HMOs) or preferred provider organizations.
In a managedfloat, the exchange rate of a country’s currency can “float” up or down in response to market forces, but only within boundaries set by the government.
Managerial slack is inefficiency that derives from weak or absent incentives for diligence by managers.
^ From October 1994 through 14 January 1999, the official Brazilian rate was determined by a managedfloat; since 15 January 1999, the official rate floats independently with respect to the US dollar.
^ From 1997 to 2001, Iran had a multi-exchange-rate system; one of these rates, the official floating exchange rate, by which most essential goods were imported, averaged 1,750 rials per US dollar; in March 2002, the multi-exchange-rate system was converged into one rate at about 7,900 rials per US dollar.
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