In the context of the exchange rate the term quot dirty floating quot refers to ........

Indian Economy (Easy) Money and banking

In the context of the exchange rate, the term "dirty floating" refers to

determining the exchange rate completely by the market forces.

supplying fake currency notes in an exchange rate of a country.

buying and selling of foreign currencies by the Central bank from the country's exchange reserve to stabilize the domestic currency.

supplying of local currency in the domestic exchange rate due to hyperinflation.

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Explanation:

Fixed-Rate or Fixed Float: Under this system, Central bank decides the official exchange rate. A set price will be determined against a major world currency (usually the U.S. dollar, but also other major currencies such as the euro, the yen, or a basket of currencies). To maintain the local exchange rate, the central bank buys and sells its currency on the foreign exchange market in return for the currency to which it is pegged.
Flexible Rate or Free Float: When the exchange rate is decided by the market force (demand and supply of currency), it is called the flexible exchange rate.
Managed floating exchange rate or Dirty Floating Rate: It is a combination of the flexible exchange rate system and a fixed rate system. Under this, central banks sometimes intervene by selling foreign currencies in the exchange to stabilize the domestic currency, this is called as dirty floating.