Pimpy
Question: "When you say, managed float, if it hits Forex tonight and comes out let's call it $0.22...if that thing shot up to $1.00 in 24 hours are they going to try to restrict it?" There has to be more growth. You would de-stabilize the economy. They're just now getting on their feet. The last thing you want to do is drop some huge exchange rate in their laps because it affects all businesses...there's a lot more involved. I'm not saying it's not going to go up in value. Obviously...I believe that it's gonna go up in value but I'm not a person that supports...we're gonna get a $3.22 rate.
Question: "What's the difference between a dirty float and a managed float?" You have a fixed rate like we have now... where they come out and say you get 1320 dinar for a dollar, fixed.
Then you have two types of floats...Free Float - that means a market determines the value no ifs, ands, or buts. The market determines the value. That's a free float. A managed float is the same as a dirty float. That means the Central Bank of Iraq will watch what happens in the free market, like Forex, but if it goes too far in one direction...then they intervene. They'll do something to control the exchange rate to keep it from getting out of whack.
No comments:
Post a Comment