Floating exchange rate system refers to the exchange rate at which one country's currency floats freely against another country's currency according to the relationship between supply and demand in the foreign exchange market.

Relatively speaking, floating exchange rate system and "fixed exchange rate system", when supply exceeds demand, the exchange rate will float downward; When demand exceeds supply, the exchange rate will rise.

1973 February 12, the United States announced the depreciation of the US dollar 1%, and then the currencies of various countries no longer maintained a fixed exchange rate with the US dollar, but implemented a floating exchange rate.

Since then, the post-war fixed exchange rate system centered on the US dollar has become a historical relic.