International cooperation: The Bretton Woods Institutions - The International Monetary Fund

4 important questions on International cooperation: The Bretton Woods Institutions - The International Monetary Fund

International Monetary Fund

The International Monetary Fund is a UN specialized agency that promotes financial stability and monetary cooperation on the global level

Why was there the need to install a global organization that would oversee the international currency system

Due to avoiding drastic global currency crises, such as during the great depression in the thirties.

What is the purpose of the Special Drawing Rights (SDR)?

To establish a 'neutral' global unit that can be used amongst central banks to complement their national reserves in a globally accepted unit
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What is the effect of this Floating System

The SDRs would now be less relevant
The principle of supply and demand would now automatically take away the pressure on currencies

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