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The flexiblerate currency exchange system was implemented on 1 March 1973. Since that time, the foreign exchange value of the United States dollar has been allowed to float. To be sure, the manipulation of interest rates in the United States, together with other actions taken by both the Federal Reserve and the Treasury, singly, together, and in concert with the central banks of the other major western economic powers, have represented efforts to influence the international currency exchange rate for the dollar. Thus, while the flexiblerate system has remained in effect since March 1973, the system has not been characterized by free floating conditions as much as it has by attempts at a managed float. Under a flexiblerate, or floating, exchange rate system, each currency is 3(theoretically) permitted to find its own level of exchange, which will (again, theoretically) change from timetotime, as economic conditions change. It is important to note that, even under a flexiblerate system, countries do not, in all situations, permit their currencies to find their own level of exchange, without making some effort to either preclude or moderate an anticipated change. As examples of such actions, the Federal Reserve Board entered the international markets often in the 1970s in order to purchase dollars and, thereby, stabilize or raise the international exchange rate for the dollar. These actions were not particularly successful. Coordinated actions by the Group of Seven Nations in the lasthalf of the 1980s, however, have been more successful in managing exchange rates within the flexiblerate system. The reason that countries, in either individual or coordinated action, attempt to manipulate exchange rates within the flexiblerate system is because often the system has not been characterized by the exchange rate stability promised by Milton Friedman, when he pressured for adoption of the system.

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