Question

What is the exchange rate system prevailing in most of the countries of the world at present? Define it.

Answer 1

In a flexible exchange rate system, the exchange rate is left free to be determined in the foreign exchange market by the forces of demand and supply. A flexible exchange rate system is a system in which the value of a country's currency is determined by the forces of demand and supply in the foreign exchange market, without direct intervention by the government or central bank.