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The global economy has witnessed great economic volatility in the first two decades of the 21st century. Yet over this period, and in particular during Covid-19, exchange rates remained unusually stable. This column presents evidence suggesting that monetary policy is a main driver of exchange rate volatility. Only when interest rate policy started to become much more uncertain over the past 15-18 months has more normal exchange rate volatility returned, albeit not at the level of the 1970s and 1980s.