Question

The government of darnia allows its currency to nominally float freely against other currencies, but the government has the right to intervene, buying and selling currency, if it believes that the currency has deviated too far from its fair value. what darnia is doing is called a _____ float.

Answer 1

Darnia is doing is called a "dirty" float.

A dirty float is a floating exchange rate where a nation's national bank infrequently intercedes to alter the course or the pace of progress of a nation's money esteem. In many occurrences, the national bank in a dirty float system goes about as a cradle against an outside monetary stun before its belongings wind up troublesome to the local economy. A dirty float is otherwise called a "managed float."

A dirty float system isn't viewed as a genuine skimming swapping scale in light of the fact that, hypothetically, genuine floating rate systems don't take into consideration intervention.