This is whereby the monetary authority has no commitment whatsoever to support a given rate of exchange but the forces of demand and supply determine the rate.



i.  Clean Float

This is a floating exchange rate whereby the central bank does not intervene at all in the forex market by buying or setting foreign currency.


ii.  Dirty Float/Managed Float

This is a floating exchange rate whereby the central bank intervenes under extreme market reactions to stabilize forex markets.



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