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.