What is the difference between “clean” float and “dirty” float?

 1. What is the difference between  “clean” float and  “dirty” float?

2. Why do countries intervene in their foreign exchange markets?

3. What is the difference between currency convertibility and exchange rate flexibility?

4. Explain how central bank intervention allows  country to keep its forex rate at  certain level.

5. What is the difference between central bank intervention in the foreign exchange market in the context of floating versus stabilized exchange rates?

 

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