Bretton Woods Agreement: The Bretton Woods Agreement is the landmark system for monetary and exchange rate management established in 1944. A Monetary System is defined as a set of policies, frameworks, and institutions by which the government creates money in an economy. A commodity money system is a monetary system in which a commodity such as gold or seashells is made the unit of value and physically used as money. Such institutions include the mint, the central bank, treasury, and other financial institutions. It is the global network of the government and financial institutions that determine the exchange rate of different currencies for international trade. The International Monetary Fund (IMF) is the central institution embodying the international monetary system and promotes balanced expansion of world trade, reduced trade restrictions, stable exchange rates, minimal trade imbalances, avoidance of currency devaluations, and the correction of balance-of-payment problems. The purpose was to design a postwar international monetary system. ADVERTISEMENTS: International monetary system refers to a system that forms rules and standards for facilitating international trade among the nations. Bretton Woods System: 1945- 1972 Named for a 1944 meeting of 44 nations at Bretton Woods, New Hampshire. For more than one hundred years, the gold standard provided a stable means for countries to exchange their currencies and facilitate trade. It was developed at the United Nations Monetary … […] Origins. The international monetary system had many informal and formal stages. The goal was exchange rate stability without the gold standard. The money retains its value because of its physical properties. 22. The Bretton Woods Agreement, signed by the main industrial economies after the Second World War, established a set of rules to regulate the international monetary system with the intention of assuring monetary stability. Resulted in ; The result was the creation of the IMF and the World Bank 1. With the Great Depression, the gold standard collapsed and gradually gave way to the Bretton Woods system. International Monetary Fund. It helps in reallocating the capital and investment from one nation to another. international monetary system a system for promoting INTERNATIONAL TRADE and SPECIALIZATION while at the same time ensuring long-run individual BALANCE OF PAYMENTS EQUILIBRIUM.To be effective, an international monetary system must be able to: provide a system of EXCHANGE RATES between national currencies;; provide an ADJUSTMENT MECHANISM capable of removing payments … Monetary System Definition. Cristina Terra, in Principles of International Finance and Open Economy Macroeconomics, 2015. The first half of the 20th century was marked by two world wars that caused enormous physical and economic destruction in Europe and a Great Depression that wrought economic devastation in both Europe and the United States.These events kindled a desire to create a new international monetary system that would stabilize currency exchange rates without backing … As per this article, IMF is exercising surveillance to ensure proper working and balance in the international monetary system, i.e., by avoiding manipulation in the exchange rates and by adopting intervention policy to counter short-term movements in the … The International Monetary Fund (IMF) is an international organization, headquartered in Washington, D.C., consisting of 190 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world while periodically depending on the World Bank for its resources.