Historical events in the foreign exchange market (1) Bretton Woods system - the dollar became the world currency (1944)

  • 2023/2/25 10:08:55
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In July 1944, representatives of 44 countries gathered at Bretton forextradingmarket, New Hampshire, to discuss the establishment of a new cashback forex. Managing the Post-World War II International EconomyIn the aftermath of World War II, most people agreed that an unstable international economy was one of the root causes of the war forex trading session times that the future had to prevent the re-emergence of this instabilityFamous economists John Maynard Keynes and Harry Dexter White each proposed programs, the initial one being for Britain to become part of the Lend-Lease ActThe Lend-Lease Act was an American act designed to assist Britain After many negotiations, the final version of the Bretton Woods agreement consisted of several points: the establishment of important international organizations, the promotion of fair trade and international economic cooperation the adoption of fixed exchange rates for the exchange of currencies gold and the dollar can be converted into each other, and the dollar thus became one of the worlds reserve currencies of the three articles mentioned above, only the first one still exists today the Bretton Woods agreement established These organizations still exist today and play a vital role in the development of the international economy and the establishment of rules. For example, under the Bretton Woods system, the IMF has implemented the Bretton Woods system price of $35 for one ounce of gold, as well as the fixed exchange rate. The IMF also provided the necessary financing to ensure that the fixed exchange rate system did not cause distortions in international economic fundamentals After the end of the Bretton Woods system, the IMF and the World Bank have been working closely together and now both institutions regularly grant loans to developing countries to help them build public infrastructure. In addition, in order to ensure that these countries have virtually equal trade status and legal access to trade with industrial countries, the IMF and the World Bank must work closely with the General Agreement on Tariffs and Trade (GATT), which began as a temporary organization and is now dedicated to removing barriers to trade. --The Bretton Woods system operated from 1944 to 1971 until it was replaced by the SmithsonianAgreement, an international pact initiated by U.S. President Richard Nixon to Unfortunately, the Smithsonian Agreement had the same serious flaws as the Bretton Woods Agreement. The Smithsonian Agreement had equally serious flaws: despite the cessation of the exchange of gold and the Kwanzaa dollar, it maintained a fixed exchange rate system that was unable to address the continued increase in the U.S. trade deficit and the international need to devalue the dollar. Although this did lead to several currency crises and more violent currency fluctuations, the free floating exchange rate system allowed the market to self-regulate and the market to determine the proper value of currencies without hindrance As for the Bretton Woods agreement, perhaps its most memorable contribution to the international economic scene was that it changed the status of the dollar despite the continued strong performance of the British pound and the presence of the euro, a Although the British pound remains strong and the euro, a revolutionary currency, shines, the dollar remains one of the worlds reserve currencies today. Note: The General Agreement on Tariffs and Trade (GATT) is the predecessor of the World Trade Organization.