Question

What is the role of central bank in the following exchange rates:
1) Fixed exchange
2) Floating exchange
3) Managed floating

Answer 1

Dear Student,
​​​​​​1) Fixed exchange rate-Central bank have to maintain foreign reserve to manage the officially determined exchange rate .
2) Floating exchange rate - In this central bank does not intervene.
3) Managed floating- This is the mix of both fixed and floating exchange rate,in this central bank can sell or buy the securities to maintain market volatility.

Note- This question is from economics not from business studies.
Regards