A country's decision to allow its currency value to change freely. The currency is not constrained by central bank intervention and does not have to maintain its relationship with another currency in a narrow band. The currency value is determined by trading in the foreign exchange market. Bloomberg Financial Dictionary
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floating exchange rate UK US noun [C] (also floating rate) ECONOMICS
► an exchange rate that is allowed to change in relation to the value of other currencies: »
Under the floating exchange rate system, a country's currency is supposed to adjust to ensure that its economy stays healthy.
Financial and business terms. 2012.