The system of Bretton Woods was financial management system that recognized a fresh financial order. Name is derived from location of meeting where agreements were drawn, Bretton Woods. This meeting happened in 1994 in the month of July. The agreement of Bretton Woods was mainly responsible for setting the International Financial Fund. This particular system was an effortfor avoiding universal economic disasters like ones experienced in 1930.
The purpose behind Bretton
The determination behind Bretton Woods was to set a new system of regulations, rules and processes for important economies of world. The main aim of agreement was financial stability for important economic powers in the world. This particular system was made for addressing systemic imbalances without disturbing the system.
Bretton Woods Effects
Bretton Woods invented US Dollar in the form of reserve currency of world. It is the needed world currencies that need to be attachedto dollar instead of gold. The expiry of Bretton Woods began in 1971 when Nixon took US off Gold Standard to stalk gold outflow. By the year 1976, the main valuesof Bretton were uncontrolled and the popular currencies of the world started to float again. It is regarded as a significant event for the traders as it is regarded as the foundation of Forex trading.