The article discusses how central banks manage exchange rates when interest rates are near zero. If interest rates are positive, central banks can control exchange rates easily. But if rates are negative, trying to control exchange rates leads to zero interest rates, capital inflows, and costs from holding foreign reserves. In this case, policies like negative interest rates or capital controls can help reduce these costs. When interest rates are close to zero, violations in covered interest parity are more likely, leading to central banks accumulating reserves.