Which system allows exchange rates to be market determined but can still be subject to government intervention?

The dirty float system, also known as a managed float, is characterized by allowing exchange rates to be determined primarily by market forces while still permitting government intervention to stabilize or influence the currency's value. In this system, central banks may intervene in foreign exchange markets to prevent excessive fluctuations, thereby providing a mechanism for smoothing out volatility and achieving certain economic objectives.

In contrast, other systems such as the free-floating system operate without government intervention, allowing exchange rates to fluctuate solely based on supply and demand. A hard peg, on the other hand, fixes the exchange rate to another currency or a basket of currencies with little to no fluctuation allowed. The flexible exchange rate system is similar to the dirty float but typically implies even less government intervention, leading more to pure market determination than managed approaches.

Thus, the dirty float effectively balances market determination with the capacity for interventions, making it a suitable system for the described context.