Question

State whether the given statement is true or false:
‘Managed Floating Exchange Rate is decided by market forces but remains within a specific range as decided by central bank’.

Answer 1

Answer:

true

Explanation:

currency floating and BOP related key points will be discussed in it

Answer 2

Answer:

‘Managed Floating Exchange Rate’ is decided by ‘market forces’ but remains within a specific range as decided by ‘central bank’ is a TRUE statement.

Explanation:

Managed Floating Exchange Rate is a method where the ‘exchange rate’ is determined by the forces of ‘supply and demand’ for a particular currency in the international ‘money market’.

The ‘Central bank’ of a country can also decide to use their intervention in the ‘currency market’ to manage the exchange rate so that it does not slip out of the situation and to keep it within a specific control.