Exchange rate policy is one of the most important area of monetary authority in which monetary policy makers can simultaneously influence many other economic trends, but also the overall macroeconomic situation in the economy. The importance of exchange rate policy is best evidenced by the fact that a timely exchange rate regime with coordinated monetary and fiscal policy prevented the complete collapse of the American financial system at the beginning of the 21st century, when a severe financial crisis prevailed. The choice of exchange rate regime is a very complex task that poses numerous challenges to monetary policy makers, especially if we consider that the operation of exchange rate policy has an impact on many macroeconomic variables and overall economic stability. Today's economic practice knows the so-called three large groups of exchange rate regimes: a fully rigid or fixed exchange rate, a variable or fluctuating exchange rate, and an intermediate exchange rate regime. Which regime will be applied will mostly define the certain specifics of an individual economy. The acceptance of one regime within one economy does not necessarily mean that the same regime will be the best within another economy. Finally, the purpose and goal of exchange rate policy today is mostly reflected in finding the optimal exchange rate policy and achieving the best results available for the economy. The research part of the paper analyzes the current exchange rate regime of the Republic of Croatia in order to assess its effectiveness and find an answer to the question of the possible impact of a more flexible exchange rate regime on the economy. Within this final paper, the known exchange rate regimes will be theoretically presented and analyzed, with special emphasis on the regime in force in the Republic of Croatia. The aim of this paper is to analyze and present exchange rate regimes and their advantages and disadvantages from a theoretical point of view in order to finally draw conclusions about more functional exchange rate regimes in order to have the best possible alternative of exchange rate policy in near future.