_________ refers to a system in which foreign exchange rate is determined by market forces and central bank influences the exchange rate through intervention.

Flexible exchange rate system

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Managed floating rate system

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Floating exchange rate

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Fixed exchange rate system

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is D Managed floating rate system
Managed floating is a tool employed by the Central bank to restore the value of the country's currency in relation to other countries within the desired limits, even when the exchange rate is determined by the market forces of demand and supply.

Suggest Corrections

Similar questions

(a) What is foreign exchange rate?

(b) How it is determined under fixed and flexible exchange rate system?

(a) What causes disequilibrium in BOP?

(b) Why is flexible exchange rate better than fixed exchange rate system?

Join BYJU'S Learning Program