**Article:**
In July 1944, representatives from 44 Allied nations gathered in Bretton Woods, New Hampshire, to design a new international monetary framework aimed at promoting global economic stability after World War II. The conference resulted in the establishment of key institutions, including the International Monetary Fund (IMF) and the World Bank, which were created to oversee monetary cooperation and provide financial assistance for reconstruction and development.
The Bretton Woods system introduced fixed exchange rates, with currencies pegged to the US dollar, which was convertible to gold. This arrangement sought to prevent competitive devaluations and encourage international trade and investment. The framework guided global economic relations for several decades until the early 1970s, when the system transitioned to more flexible exchange rates.
**Why this matters**
The Bretton Woods agreement laid the foundation for the modern global financial order by promoting cooperation and stability in international currency markets. Its institutions continue to play a central role in addressing economic challenges worldwide. Understanding this historic framework helps explain the evolution of today’s global economy and the mechanisms used to manage international monetary policy.
Source: NewsData