What is meant by managed floating?

● Managed floating rate system is the system in which the central bank of a country allows the exchange rate to be determined by the market forces.

● However, sometimes it intervenes to influence the exchange rate.

● The exchange rate is determined on the basis of certain rules and regulation which are officially declared in the foreign exchange market.

● To ensure that the exchange rate is within the targeted value, a reserve of foreign exchange is maintained by the central bank of the country.