Would the central bank need tointervene in a managed floating system?

1.	Would the central bank need tointervene in a managed floating system? Explain why?
Answer» 1. In a managed floating system a central bank of a country has freedom to bring change in the exchange rate within certain limits. 2. A country is allowed after information to the IMF to bring a certain limited amount of change in the rate of exchange. 3. A central bank cannot bring change in its exchange rate by more than 10%. For it, permission of IMF is necessary.

Would the central bank need tointervene in a managed floating system? Explain why?

Answer»

1. In a managed floating system a central bank of a country has freedom to bring change in the exchange rate within certain limits.

2. A country is allowed after information to the IMF to bring a certain limited amount of change in the rate of exchange.

3. A central bank cannot bring change in its exchange rate by more than 10%. For it, permission of IMF is necessary.

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Would the central bank need tointervene in a managed floating system? Explain why?

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