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Exchange rate policy has always been central to the work of the IMF. Ever since the breakdown of the Bretton Woods system, there has been a widespread desire to avoid excessive volatility in the exchange rates of the world’s major currencies. And the IMF’s bilateral and multilateral surveillance has become an important way for the international community to signal its views and seek better coordination of underlying economic policies. Our Research Department’s analysis, for example, points to the recent persistent overvaluation of the U.S. dollar and the undervaluation of the euro. But in a world of highly integrated global capital markets, I do not see any realistic alternative to floating exchange rates among the major currencies. So, our members need to deal with currency misalignments by concentrating on the fundamentals—especially, in the cases of the European Union and Japan, by accelerating the pace of key structural reforms.