Question

What was the international monetary system established at the Bretton Woods? What was the major international currency? How were nations conducting their international monetary relations in the Bretton Woods system?

Answer 1

The Bretton Woods system established a new global monetary system , provide for a frame work of monetary and financial stability. The US dollar as the major international currency replacing gold. The members of the system were required to establish a parity of their national currencies in terms of a reserve currency i.e. peg and were required to maintain the exchange rates with in 1% of the parity by having to intervene in their respective foreign exchange markets ( essentially buying and selling foreign exchange).