What is Managed Currency?
How Does Managed Currency Work?
Let's say Country X's is called the Widget. The Country X does a of trade with Country Y, which uses the Gidget as its currency. The Country X central bank decides to manage its currency by setting the at 5 Gidgets per Widget.
Country Y does not manage its currency. Accordingly, in Country Y, the number of Gidgets required to buy a Widget varies according to how much demand there is for Widgets and Gidgets.
Why Does Managed Currency Matter?
Managed currency is the opposite of currency in the global marketplace. Most currencies, however, are managed by their central banks to some degree in order to achieve or maintain economic stability.whose is determined by the amount of supply and demand for the