"First of all I would look at it as not rupee sliding, I would look at it as dollar strengthening, dollar strengthening incessantly" said Nirmala Sitaraman after attending the Annual meetings of the IMF and the world Bank

Based on the above passage, answer the questions mentioned below :

An exchange rate which is determined by the market forces of demand and supply of foreign exchange :

Flexible exchange rate

The correct answer is option (2) : Flexible exchange rate

In a flexible exchange rate system, the value of a currency is determined by the foreign exchange market, and it can fluctuate based on the forces of supply and demand.