Bretton Woods Agreement Class 10

The gold standard`s support of money became a serious problem in the late 1960s. In 1971, the problem was so serious that U.S. President Richard Nixon said the possibility of turning the dollar into gold was suspended « temporarily. » The step was inevitably the last straw for the system and the agreement he sketched. However, the agreement brought together 44 nations from around the world on a larger scale and brought them together to resolve a growing global financial crisis. It has helped strengthen the global economy as a whole and maximized the benefits of international trade. The Bretton Woods Agreement was reached in 1944 at a summit in New Hampshire, USA, at a place of the same name. The agreement was reached by 730 delegates representing the 44 allied nations that attended the summit. As part of the agreement, delegates used the gold standard In the simplest terms, the gold standard is a system used to understand the value of the currency, and this means that a currency is compared to the value it is worth in gold and at what price it can be exchanged for gold. to establish a fixed exchange rate.

The agreement created the World Bank and the International Monetary Fund (IMF), U.S.-backed organizations that would oversee the new system. The Bretton Woods system is a set of uniform rules and guidelines that provide the framework for the establishment of fixed international exchange rates. Essentially, the agreement invited the newly created IMF to set the fixed exchange rate of the world`s currencies. Each country represented has taken responsibility for maintaining the exchange rate, with incredibly narrow margins above and below…