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What is bretten wood system

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What is bretten wood system
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Yogita Ingle 5 years, 1 month ago

The Bretton Woods Conference took place in the July of 1944 at Bretton Woods in New Hamsphire, USA. Under this system, the International Monetary Fund (IMP) and the International Bank for Reconstruction and Development (IBRD) were established.
The main terms of this agreement were:
(i) Formation of IMF and IBRD (also called the World Bank).
(ii) To establish monetary cooperation amongst the member countries.
(iii) Adjustable peg foreign exchange rates system was followed, i. the exchange rates were fixed, with the provision of changing them if necessary.
Currencies were required to be convertible for trade related and other current account transactions. The governments, however, had the power to regulate capital flows.
(iv) All member countries were required to subscribe to the IMF’s capital.

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