For a floating exchange rate,if a central bank does not intervene to influence the currency this is called a :
A) partial float.
B) clean float.
C) dirty float.
D) hard float.

Question

Quizplus · Accepted Answer

A clean float is when the central bank of a country does not intervene in the foreign exchange market and allows market forces to determine the value of the currency. This is the opposite of a dirty float, where the central bank may intervene to influence the exchange rate, and a hard float, where the exchange rate is fixed and does not fluctuate. A partial float is not a commonly used term for exchange rate regimes.

For a Floating Exchange Rate,if a Central Bank Does Not