International Business

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International Monetary System (IMS).
The regulations and measures used to govern the foreign exchange trade are called the international monetary system. In this system, there are rules and regulations, which currency merchants use to judge the value of a certain currency. Unlike the physically present Federal Reserve System or the coded social security system, this IMS is subject to the forex market (Genberg, 2012).
In 1944, delegate of 45 nations convened a meeting at Bretton to confer about Europe’s revival from World War II. In it, the International Monetary Fund (IMF) and the World Bank emerged to provide funds to Europe and supervise the IMS of fixed exchange rates. The agreement stipulated that the dollar rate would cling to the gold price with other currencies clinging on the dollar. This system persisted until 1972 where it collapsed to pave way for the managed floating exchange rate system prevalent to date.
This system collapsed due to demand, supply and currency rates dynamics in a nation. Irrespective of the pegging rules and fixed rate systems, the currency would surpass or diminish in value against other currencies given the econo...