Flexible Exchange Rate

See: Bretton Woods.

A flexible exchange rate is one that can do a backbend around the entire world.

Flexible exchange rates bend to the whims of global supply and demand of currency. As prices of foreign exchange change, so does the flexible exchange rate of a country’s currency.

There are two main types of flexible exchange rates: floating exchange rates and managed (or dirty) floating exchange rates. The first is free-for-all, whatever-goes, completely free-market exchange rates...while the latter has some government intervention. With modern global interconnectivity via forex markets, flexible exchange rates (which determine a country’s currency’s value) are possible.