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General TradingD
Dirty Float
A dirty float, also known as a managed float, is an exchange rate system where a currency's value is primarily determined by market forces, but the central bank occasionally intervenes to influence the rate. This hybrid approach allows for market-driven price discovery while preventing excessive volatility or misalignment.
Example
“China operates a dirty float exchange rate system, allowing the yuan to fluctuate within a managed band while the People's Bank of China intervenes when movements become excessive.”