The world monetary system and its importance in the modern world

  Under the monetary system in the modern world is understood the monetary circulation both within developed countries and monetary relations with other states. The world currency system did not immediately take the form in which we used to see it.

Initially, this system developed spontaneously, no one attempted to regulate it. At that time it was based on the gold standard, but gradually it began to be regulated. As a result, she came to the fact that it is based on paper and credit money.

The modern world monetary system has gone a long way of development, which in many respects repeats those stages through which it was necessary to pass and the national monetary systems of individual states. For example, the original any national monetary system was based on the gold coin standard, gold was a guarantee of stability and acted as a payment method. Later, the use of gold coins was abandoned using only ingots as collateral. At the last stage, these systems came to use paper and credit money, here the main role is taken credit.

Currency system in the international arena

  Approximately the same way did the world monetary system. Although several other laws operate on the world stage, the situation of the development of the system had similar trends. The main difference is that in international relations there has never been a gold coin period, and the use of ingots has been preserved for several centuries.

However, at the same time, various auxiliary credit money developed. Initially, they became special bills or checks. All this expressed the debt obligations of a country to another state or international community.

The world currency system in the twentieth century

  By the beginning of the twentieth century, the world situation began to change, primarily in the economic and trade relations of states. In this situation, the world monetary system has ceased to meet all the requirements of such relations. It took reforms that could bring this system to a new level.

The national and world monetary system had to become less spontaneous, so reliable control was required. In this regard, by the 1930s, states had switched from the use of the gold standard to paper and credit relations. Such a system gave several additional opportunities for economic regulation.

Strongly influenced by this situation, the Second World War, which significantly changed the balance of power in the world. In particular, large gold reserves were concentrated in the US, so the influence of the dollar spread.

In 1944, for the first time, it was decided to officially formalize the principles of the world monetary system. At the UN conference, gold was recognized as the basis of the system, and the dollar and pound sterling were called the main currencies of the world. At the same time, the International Monetary Fund was founded . All this helped make the world currencies more convertible, and it also helped to settle many relations and get rid of the chaos that prevailed then in the international economy.

However, later the situation began to change, Europe and Japan were able to bypass the United States in gold reserves, so the economic basis laid down in the international monetary system was shaken. The dollar rate began to fall, and many countries refused to maintain the exchange rate of their national currencies in equality with the dollar. The United States devalued the dollar, and in many countries switched to floating rates.

Since 1973, the price of gold began to be determined in international markets, and the world monetary system got rid of the influence of gold. Such relations remain so far, although periodically changes are made that would meet international requirements.