International Monetary System

The international monetary system is a set of certain legislative acts and regulations that regulate the work on the foreign exchange markets of central banks that ensure the issuance of cash . The task of the main provisions by which they are guided in their activities is to facilitate the processes of foreign trade transactions to such an extent that all participants in the transaction have the maximum benefit. The effectiveness of world trade should promote the prosperity of the economic systems involved in it.

The international monetary system was built historically by organizing monetary relations between different countries. Its main principles are enshrined in the agreements existing at interstate levels. The appearance and further evolution of the international monetary system testifies to the objective development of the function of international capital, which requires certain conditions within the world monetary sphere.

Economic ties between different countries without a clear system of financial relationships are impossible. These are economic calculations that are directly related to the functioning of the world currency. Economic relations between states are very diverse. These include foreign trade relations, tourism, the exchange of scientific discoveries, the migration of capital, the supply of loans, etc.

The international monetary system, performing the function of world money, which serves as a criterion for the value of goods, is a means of accumulation, payment and circulation. The main task that it performs is to mediate international settlements.

The international monetary system is a component of a number of its constituent components. The main ones are:

- arrangements between countries;

- monetary and financial interstate organizations;

- world money commodity;

- Exchange Rates;

- international liquidity.

The international monetary and financial system includes various funds and organizations. These structures unite a multitude of states, national societies and institutions created to achieve common goals related to politics, economics, the social sphere, culture, science, etc.

International organizations form their own funds, the purpose of which is the multifaceted coordination activities of all participating countries. This process becomes possible after the signing of agreements, the action of which is aimed at maintaining the common financial, monetary and credit policies of the participating States. Such international organizations are the following: IIB, MFER, IBRD, IMF, UN with all its institutes, IAEA, WFDD, etc.

The world monetary goods can be accepted for calculation in any state as a means of compensating the wealth taken out of the country. It serves international relations. Initially, gold was used as the international means of calculation. Over time, it was replaced by the currencies of the leading states of the world. Fiduciary or compositional money (SDR, ECU) has now spread. Their use is based on a confidential relationship with the issuer.

Currency does not apply to any new type of cash. This is a special way of their functioning. National funds, which act in the mediation of credit and international relations, automatically become a currency. Its value is determined in relation to the monetary unit of another country. Certain factors influence the value of the exchange rate . These include:

- solvency of the state;

- supply and demand in the currency market;

- balance of payments;

- Inflation.