Dual Exchange Rate


DEFINITION of 'Dual Exchange Rate'

A situation in which there is a fixed official exchange rate and an illegal market-determined parallel exchange rate. The different exchange rates are used in different situations, either in exchanges or evaluations, as mandated by the government.

BREAKING DOWN 'Dual Exchange Rate'

Argentina adopted a dual exchange rate following its catastrophic economic troubles in the beginning of 2002. The illegal market-determined exchange rate would be preferred in a situation such as a cost-benefit analysis conducted on behalf of the Argentinian government.

  1. Exchange Rate

    The price of a nation’s currency in terms of another currency. ...
  2. Floating Exchange Rate

    A country's exchange rate regime where its currency is set by ...
  3. Fixed Exchange Rate

    A country's exchange rate regime under which the government or ...
  4. Dual Currency Issue

    A bond that pays interest in one currency but pays the principal ...
  5. Dual Currency Deposit

    A fixed deposit with variable terms for the currency of payment. ...
  6. Dual Listing

    When a company's securities are listed on more than one exchange ...
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