This chapter discusses exchange rate policy and its connection to monetary policy. It examines whether exchange rate stabilization should be a primary policy objective and questions if a country should adopt another country's currency. The chapter outlines the mechanics of exchange rate management and interventions, and explores the costs and benefits of fixed exchange rates versus floating rates. It analyzes speculative attacks on fixed regimes and different types of fixed exchange rate regimes like Bretton Woods, currency boards, and dollarization.