Business Studies

Which of the following is true for 'dirty float'?


ANSWER

Both (B) and (C) above


SOLUTION
In order to reduce the inefficiencies in the foreign exchange market central banks generally intervene in the currency markets to smoothen the fluctuations. Though officially the exchange rate may be floating, in reality the central bank  may intervene regularly in the currency market,unofficially keeping it fixed. Such a system is referred to as a 'managed float' or a 'dirty float'.
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