BANKING AFFAIRS

Detailed explanation-1: -A floating exchange rate is also known as a flexible exchange rate, and changes according to supply and demand. This means if the demand for a currency is low or it’s widely available it’s value goes down, and conversely if it’s in demand or short supply, it’s value goes up – and with it the exchange rate.

Detailed explanation-2: -The flexible exchange rate system is also called the floating exchange rate system.

Detailed explanation-3: -Flexible exchange rate system is the exchange system where the exchange rate is dependent upon the supply and demand of money in the market. In a flexible exchange rate system, the value of the currency is allowed to fluctuate freely as per the changes in the demand and supply of the foreign exchange.

Detailed explanation-4: -A floating (or flexible) exchange rate regime is one in which a country’s exchange rate fluctuates in a wider range and the country’s monetary authority makes no attempt to fix it against any base currency. A movement in the exchange is either an appreciation or depreciation.

Detailed explanation-5: -Flexible exchange rates can be defined as exchange rates determined by global supply and demand of currency. In other words, they are prices of foreign exchange determined by the market, that can rapidly change due to supply and demand, and are not pegged nor controlled by central banks.