In this lecture, I will try to draw together some lessons and questions about exchange rate systems, and attempt to state what is known and what is not known about them. I will also comment on problems of IMF surveillance. I start in Section I by revisiting the bipolar issue with regard to exchange rates, restating the hypothesis and updating it in light of events of this decade. I will argue that the bipolar view is fundamentally correct for emerging market and industrialized countries with open capital accounts –a qualification that was stated in Fischer (2001), but that was perhaps not adequately stressed. In Section II I discuss managed floating regimes and exchange market intervention, for countries with open capital accounts. Section III is devoted to the choice of exchange rate regime for countries whose capital account is not open; and I conclude with comments on IMF surveillance and advice.
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