IntroductionThe importance of exchange rates in the economy of any society cannot be overemphasized since it is a relevant pricing concept for any nation. Changes in exchange rates can lead to massive reallocations of raw materials, resources as well as production between tradable and non-tradable sectors of any country's economy. But it is rare that the concept of exchange rate is truly described as it is: a relative price which, like any other economic entity, responds to the laws of supply and demand. Seen from the point of view of a price concept approach, the exchange rate, according to fundamental economic theories, can then be evaluated and determined within an economic system, its behavior as well as its meaning can then be understood in describing and paying particular attention to certain factors. within the economic system that influences it. In recent times, the IMF has emphasized the need for better coordination of exchange rate and monetary policies in key areas of macroeconomic management, in light of increasing capital mobility. In close relationships, the benefits or merits of exchange rate regimes and their alternatives can be better argued within a coherent monetary order framework in terms of the interaction of monetary and exchange rate policies. Exchange rates and exchange regimes are virtually separate entities within a larger, more versatile set of arrangements called the monetary order. Therefore, policies directed there should generally and ideally be discussed in this broader and more versatile context. An appropriate or adequate exchange rate regime is most often seen as a complex and technical process. Several countries around the world have adopted floating...... middle of paper ......tp://www.dof.gov.ae/en-us/publications/Lists/ContentListing/Attachments/53 / 1.pdfSebastian, November 11, 2013. Latter, T. (1996) The choice of the exchange rate regime. Center for Central Banking Studies, Bank of England, London. Jeong, J. and Lee, Y. (2001) International transmission of inflation under alternative exchange rate regimes: Empirical evidence and its implications. Global FinanceJournal, 12, p.121-137.McKinnon, Ronald. (1990). The exchange rate and the trade balance: island economies versus open economies; Review of Open Economies, Vol. 1, n°1. Mabry and Ulbrich, (1994) Economy. 2nd edition. United States, Houghton Mifflin Company. Morris, G. (2003) Too sensational: on the choice of exchange rate regimes. EconomicJournal, 113(491), p.663. Mishkin, FS (1996) Understanding Financial Crises: A Developing Country Perspective. NBER Working Paper, 5600, p..1-21.