This article investigates how Milton Friedman's views on exchange rates in emerging nations evolved through time. Early on he supported flexible exchange rates for most less developed countries. He endorsed several forms of flexibility, including auctions and the “crawling peg.” Starting in the early 1970s, he favored a system characterized by fixed rates and no central banks. From that point on he argued that while flexible rates were the preferred option for advanced nations, they were the second-best solution for (most) developing countries. This article helps elucidate Friedman's views on the use of pegged exchange rates during stabilization programs (Chile and Israel) and on exchange rates in socialist countries (China and Yugoslavia).