With reference to Managed Floating Exchange Rate System consider the following statements 1 It is a ...........

Economic Affairs Balance of Payments

With reference to Managed Floating Exchange Rate System, consider the following statements:

1. It is a system in which central bank allows the exchange rate to be determined by the market but intervenes at times.

2. Managed Floating Exchange Rate System is followed in India.

Which of the statements given above are correct;

1 only

2 only

Both 1 and 2.

Neither 1 nor 2.

Managed floating exchange rate system is a system in which the central bank allows the exchange rate to be determined by market forces but intervene at times to influence the rate. Hence statement 1 is correct.
India follows a managed floating exchange rate system. RBI acts as a controller in the exchange rate market. Hence statement 2 is correct.