ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Managed floating exchange rate system is the amalgamation of the flexible exchange rate system and the fixed exchange rate system. Under this system, central banks intervene to buy and sell foreign currencies in an attempt to moderate exchange rate movements.

Detailed explanation-2: -Managed Exchange Rate system: It is the hybrid or mixture of fixed and flexible exchange rate system. Dual Exchange Rate System: It is evolved by India. There is two exchange rate for Rupee one is official and another is market rate.

Detailed explanation-3: -A managed floating exchange rate is an exchange rate system that allows a nation’s central bank to intervene regularly in foreign exchange markets to change the direction of the currency’s float and/or reduce the amount of currency volatility. This exchange rate system is also known as a “dirty float”.

Detailed explanation-4: -A managed floating exchange rate (also known as dirty float’) is an exchange rate regime in which the exchange rate is neither entirely free (or floating) nor fixed. Rather, the value of the currency is kept in a range against another currency (or against a basket of currencies) by central bank intervention.

Detailed explanation-5: -A dirty float is also known as a “managed float.” This can be contrasted with a clean float, where the central bank does not intervene.