Fixed and Floating Exchange Rates

This is a video recording of a revision webinar looking at the economics of floating, managed floating and fixed exchange rates.

The choice of exchange rate regime is one of the most important a country can make as part of monetary policy.  The main options are:

1. A free-floating currency where the external value of a currency depends wholly on market forces of supply and demand
2. A managed-floating currency when the central bank may choose to intervene in the foreign exchange markets to affect the value of a currency to meet specific macroeconomic objectives
3. A fixed exchange rate system e.g. a currency peg either as part of a currency board system or membership of the ERM II for countries intending to join the Euro.

The slides from this revision webinar on fixed and floating exchange rates can be viewed here: