Under managed floating rates, the response to this temporary disturbance is exchange-rate intervention by the Federal Reserve to keep the exchange rate at its long-term equilibrium level of $0.50 per franc. During the time period in which demand is at D1, the central bank will sell francs to meet the excess demand. As soon as the disturbance is over, and demand reverts back to D0, exchange-market intervention will no longer be needed. In short, central bank intervention is used to offset temporary fluctuations in exchange rates that contribute to uncertainty in carrying out transactions in international trade and finance.