Question:
Under the ............ Exchange Rate System, the Central Bank can control the foreign exchange rate in a range bound manner.
Under the ............ Exchange Rate System, the Central Bank can control the foreign exchange rate in a range bound manner.
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The managed floating exchange rate system gives flexibility in the currency market while allowing for central bank intervention to maintain stability.
Updated On: Jul 1, 2025
- Fixed
- Flexible
- Managed floating
- Gold standard
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The Correct Option is C
Solution and Explanation
Under a managed floating exchange rate system, the central bank allows the exchange rate to fluctuate but intervenes in the market to prevent excessive volatility and ensure stability. This system is often used by countries with floating exchange rates but with some degree of government control.
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