Dirty Float

Dirty Float

Summary of Dirty Float

Also known as managed float, the process whereby national monetary authorities intercede in the foreign exchange markets to prevent significant fluctuations in the values of their own or other currencies. The process is accomplished by selling reserves of currencies rising in value, or the purchase of declining currencies. In most cases there is a pre-existing agreement among major trading nations as to the appropriate value for any given currency in terms of another, and a definition of the spread, or range of values within which each currency will be permitted to float without governmental intervention.

(Main Author: William J. Miller)

Dirty Float in International Trade

Meaning of Dirty Float, according to the Dictionary of International Trade (Global Negotiator): A system in which exchange rates are partially determined by government intervention or restrictions to limit appreciation or depreciation of the country's currency. See also clean float and floating exchange rate.


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