Bretton Woods Agreement

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The Bretton Woods Agreement was a pivotal international accord reached in July 1944 by 44 countries at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire. It established a new international monetary order based on a fixed exchange rate system, where currencies were pegged to the U.S. dollar, which in turn was pegged to gold. This system aimed to prevent competitive currency devaluations and promote economic stability and growth. The agreement also led to the creation of two key institutions: the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), now known as the World Bank. These institutions have played crucial roles in global economic governance. The IMF focuses on maintaining international financial stability and supporting economic growth, while the World Bank provides loans and grants for development projects. Although the Bretton Woods system collapsed in the early 1970s, the IMF and World Bank continue to influence international economic policies and cooperation. The agreement's legacy includes fostering a multilateral approach to economic issues and promoting global trade and financial stability. Its impact extends beyond the original system, shaping modern international economic relations and governance.