All of the following exchange-rate systems require central banks to hold international reserves except:

Name: All of the following exchange-rate systems require central banks to hold international reserves except:
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Question

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In a freely floating exchange rate system, the value of a currency is allowed to fluctuate according to the foreign exchange market without direct intervention from the central bank. Therefore, it does not require the central bank to hold international reserves to maintain the exchange rate.

All of the Following Exchange-Rate Systems Require Central Banks to Hold