Today I intend to cover four items: the implications of the single currency for exchange rate policy, the institutional arrangements for the euro area’s exchange rate policy, exchange rate developments during the crisis and, finally, some other dimensions of international monetary cooperation. A single currency – a single exchange rate policy What did the creation of the euro mean for exchange rate policy?
Prima facie, the answer is straightforward. Having a single currency automatically implies having a single exchange rate and thus also a single exchange rate policy. Yet the repercussions of EMU go beyond these “automatic” consequences. BIS Review 44/2009  1  Prior to EMU, Europe consisted of open and, for the most part, small economies.