Question

define floating exchange rate

Answer 1

Floating exchange rate, also called as the flexible exchange rate is the one wherein in the exchange rate is determined by the forces of demand and supply. 

Answer 2

Floating exchange rate systems mean that while long-term adjustments reflect relative economic strength and interest rate differential between countries, short-term moves can reflect speculation, rumors and disasters, either natural or man-made. Extreme short-term moves can result in intervention by central banks, even in a floating rate environment.