The economic and financial difficulties faced by many governments and the banking community over the past year have focused attention on the role that might be played by the international monetary system in fostering a more orderly world economic environment. This chapter deals with developments in two principal features of that system. First, the exchange rate arrangements and exchange rate policies of members are reviewed, and this examination is followed by an account of the Fund’s surveillance over these policies. The second topic, international liquidity, records the circumstances leading to changes in official reserve holdings and in the availability of private credit extended across national borders, and discusses the role of the Fund in providing conditional and unconditional liquidity to its members.