When the value of a currency is determined mostly by demand and supply, but with occasional government intervention, the exchange rate system is defined as

Question

Quizplus · Accepted Answer

Managed float system refers to an exchange rate system where the value of the currency is determined by the market forces of demand and supply, but the central bank may intervene at times to stabilize the exchange rate when it is deemed necessary. This intervention can take the form of buying or selling foreign currency or adjusting interest rates. This system allows for some flexibility, unlike the fixed exchange rate system, where the value of the currency is fixed against another currency or a commodity.

When the Value of a Currency Is Determined Mostly by Demand