The international monetary system provides a medium of exchange for international transactions.

An exchange rate regime is a policy rule for intervening (or not) in the forex market.

A monetary union of different countries is a commitment to permanently fixed exchange rates.

An adjustable peg is a fixed exchange rate, the value of which may occasionally be changed.

Fixed exchange rates, perfect capital mobility, and monetary sovereignty are the impossible triad. All three cannot co-exist at the same time.

The purchasing power parity path of the nominal exchange rate is the path that keeps the real exchange rate constant. Nominal exchange rates offset inflation differentials between countries.

In a managed float, central banks intervene in the forex market to try to smooth out fluctuations and nudge the exchange rate in the desired direction.

A speculative attack is a large capital outflow. If successful, it causes a devaluation. Attacks are sometimes resisted, by raising interest rates and tightening fiscal policy. This works only if it can credibly be sustained.

Capital controls prohibit, restrict, or tax, the flow of private capital across currencies.

A currency board is a constitutional commitment to peg the exchange rate by giving up monetary independence.

Policy co-ordination is a concerted attempt by some countries to formulate policy collectively.

The EMS was a system of monetary and exchange rate co-operation in Western Europe.

In the ERM, each country fixed a nominal exchange rate against each other ERM participant. Collectively the group floated against the rest of the world.