ABSTRACT
We examined in the previous chapter the suggestion made by Mr. Keynes for the control of the forward exchange market by the monetary authorities. The question whether Central Banks should take an interest in forward exchanges, and, if so, in what manner, has been the subject of controversy for some years past. There are three main schools of thought among theoretical and practical experts. According to one, the monetary authorities should assume an attitude of complete neutrality towards forward exchange operations. They should confine their controlling activities to the market for spot exchanges and should allow forward rates to take care of themselves.
