Managed Float

Posted in Finance, Accounting and Economics Terms, Total Reads: 862

Definition: Managed Float

In the current international markets the rates of the currency of the country goes up and down because of the free trade, but the countries try to control the rates by the buying and selling of the currency and this is referred to as dirty float.

In managed float, the government of the country intervenes in the exchange market and start the buying and selling of the shares to keep the rates within the manageable limits.

It is good to keep the rates floating on its own but sometimes in case of great changes in the financial markets the rates goes up and down drastically; in this case it is advisable to keep a check on the rates.

For example, a large number of pesos were bought by the American government in 1994 to stop the depletion of the Mexican peso value.



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