flexible exchange rate

Definition

An exchange rate which fluctuates depending on the supply and demand of a currency in relation to other currencies. If there is a high demand for a particular currency, its exchange rate relative to other currencies increases, on the other hand, if there is less demand, its value decreases. Opposite of fixed exchange rate.

Use this term in a sentence

You need to make sure that you are shopping around for the best price any time you deal with a flexible exchange rate.

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The fluctuation of the flexible exchange rate meant that I left the country with far more money in my home currency than I expected to have.

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The flexible exchange rate between the yen and the dollar made it difficult to pin down the actual differences in value between the two currencies.

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flexible exchange option (FLEX) flexible expense