Abstract: Using panel data of 77 regions from the periods of 2000 to 2010 and based on GMM model, this paper studies the impact of exchange rate regime on monetary independence. The results showed that, the flexibility of exchange rate arrangement had significantly positive influence on monetary independence after controlling the effect of inflation, economic growth and trade openness; Capital control weakened the impact of exchange rate regime on monetary independence in emerging and other markets; The periodic difference of financial development strengthened the impact of financial development on monetary independence in industrial countries, whereas weaken that impact in emerging and other markets; In general, monetary independence in the federal rate rising cycle is weak than that in the federal rate declining cycle.