Floating exchange rate means that the exchange rate between the domestic currency and other currencies is not determined by the government, but by the supply and demand relationship in the foreign exchange market, and it can float freely. Only when the exchange rate fluctuates excessively will the government intervene in the market. This is a common exchange rate system in western countries after the collapse of the Bretton Woods system.

Floating exchange rate is the symmetry of fixed exchange rate, which refers to the exchange rate determined by the monetary authorities of various countries only according to the relationship between market supply and demand, and does not stipulate the official exchange rate between their own currency and another country's currency.

At present, the currency exchange rates of countries that have joined the WTO are relatively free to float.