Answer:
Supply and demand.
Step-by-step explanation:
Flexible exchange rate is the exchange rate where the value of currency react to the change in demand and supply. That means it depends greatly on the supply and demand and is therefore calculated accordingly.
It is left without intervention so as to allow the exchange rate to equate itself to the demand and supply of foreign currency.
It keeps the government away from holding foreign exchange reserve and helps in maximizing resource allocation.