(i) Fixed Exchange Rate – Fixed exchange rate means the exchange rate which is officially declared and fixed uver a specified period. It is changed from time to time according to need. It requires regular control and monitoring by the government. It is stable and certain and not subject to wide fluctuations. It checks speculation in foreign exchange market. 

(ii) Flexible Exchange Rate – Flexible exchange rate means the exchange rate which is floating because it is determined by demand and supply in the foreign exchange market. It does not require any intervention by the government. It is uncertain and subject to wide fluctuations. It encourages speculation. 

(iii) Managed Floating Exchange Rate – Managed floating foreign exchange rate means flexible foreign exchange rate system in which gradual adjustments in rate of exchange take place through the intervention of the government. This is done to control the exchange rate i.e., to make exchange rate stable. Thus, managed floating system is a mixture of flexible and fixed exchange rates. However, managed floating requires strict rules and guidelines otherwise it may be abused to detriment of other countries.