Floating Currency

Floating Currency in International Trade

Meaning of Floating Currency, according to the Dictionary of International Trade (Global Negotiator): One whose value in terms of foreign currency is not kept stable (on the basis of the par value or a fixed relationship to some other currency) but instead is allowed, without a multiplicity of exchange rates, to be determined (entirely or to some degree) by market forces. Even where a currency is floating, the authorities may influence its movements by official intervention. If such intervention is absent or minor, the expression “clean float” is sometimes used.