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Floating Exchange Rate
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What is a floating exchange rate?
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A
A system in which the value of a currency is determined by supply and demand in the foreign exchange market.
💡 Explanation:
In a floating exchange rate system, the value of a currency is determined by the forces of supply and demand in the foreign exchange market. This means that the value of a currency can fluctuate freely, depending on the relative demand for and supply of that currency.