Jurgen von Hagen examines the German central bank’s experience with international exchange rate policies and domestic monetary control. The author reviews recent research, which finds that the Bundesbank’s ability to achieve its monetary targets has been unhindered by its coordinated exchange rate policies. The author’s analysis, however, shows that the Bundesbank’s participation in coordinated interventions since 1985 have contributed significantly to the growth of the German money supply in excess of its monetary targets in the second half of the 1980s.