The monetary system of the world: from the gold standard to the current state of affairs

The monetary system of the world is a form of organization of monetary and monetary relations that have developed at this stage of market development. Its origin is associated with the emergence of money and the beginning of their functioning as a means of calculation in international payment turnover.

The evolution of the monetary system has become quite a natural phenomenon, without which the development of the world economy would be impossible. Both the introduction and the rejection of the gold standard are a response to the demands of the times, as well as confirmation of the cyclical nature of human history and the world economy.

Stages of development of the international monetary system and their features

1. Gold standard system (1821-1939), according to which any currency should be provided with gold. Banks of each country pledged to ensure free conversion of their money to noble metal at the request of the client. The monetary system assumed fixed exchange rates fixed for each individual monetary unit. Of course, this positively influenced the development of trade between countries and international investment due to the stabilization of the economic situation. Nevertheless, this currency system had a number of shortcomings, which entailed the fact that on the eve of World War II it had to be abandoned. Among them, the dependence of the well-being of the population not on the development of the economy, but on the increase or decrease in gold production, as well as the impossibility of countries pursuing an independent monetary and credit policy. 2. The Bretton Woods system (1944-1976). This currency system assumed already floating exchange rates, which allowed them to respond to changes in market conditions. The rate of all currencies was fixed in US dollars, and the US government had to ensure the exchange of its currency for gold. It was during this period that such an influential international monetary and financial organization as the IMF was created, the main purpose of which is precisely the development of trade between countries, as well as cooperation between them in the field of monetary and monetary relations. However, over time it turned out that governments are not at all interested in adjusting the exchange rates of their monetary units, and the proper level of liquidity can no longer be ensured. In addition, dependence on the US was also not pleasant for many countries. 3. In 1976, it was decided to move to the Jamaican currency system, according to which the rate of any currency is determined by the law of supply and demand. The modern monetary system assumes an independent determination by the Central Bank of the state of the exchange rate regime, which allows ensuring its long-term flexibility and short-term stability, which has a favorable effect on the development of trade and finance. The shortcomings of the Jamaican currency system include: high inflation rates, sharp changes in exchange rates and volatility in the economic situation on the market. In this regard, the leaders of each country should pay much more attention to strategic and operational planning, because now only on their concerted actions depends the well-being of the population.