The Bretton Woods Agreement was one of those turning points in the development of modern financial systems that, after World War II, established the dollar as the standard currency for world trade. While the Bretton Woods system ended under the Nixon administration, the financial institutions created by the agreement – the International Monetary Fund and the World Bank – remain permanent elements of twenty-first century finances. In this context, two financial institutions, the International Monetary Fund and the World Bank, have been established. Without these two institutions, the objective of the agreement would have been thwarted. As part of the agreement, countries promised that their central banks would maintain fixed exchange rates between their currencies and the dollar. If a country`s monetary value became too low against the dollar, the bank would buy back its currency on the foreign exchange markets. This has been of the utmost importance for the effectiveness of the adjustable peg rate. The agreement decided to use a quota and subscription system that showed the economic power of each nation. The gold standard`s support of money became a serious problem in the late 1960s. In 1971, the problem was so serious that U.S. President Richard Nixon said the possibility of turning the dollar into gold was suspended “temporarily.” The step was inevitably the last straw for the system and the agreement he sketched.
730 delegates from the 44 Allied nations were preparing to rebuild the international economic system while World War II was still raging, and gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, USA, for the United Nations Monetary and Financial Conference, also known as the Bretton Woods Conference. Delegates debated from 1 to 22 July 1944 and signed the Bretton Woods Agreement on its last day. The creation of a system of rules, institutions, and procedures for regulating the international monetary system created the IMF and the International Bank for Reconstruction and Development (IBRD), now part of the World Bank Group. The United States, which controlled two-thirds of the world`s gold, insisted that the Bretton Woods system be based on both gold and the U.S. dollar. Soviet representatives attended the conference, but later refused to ratify the final agreements and lamented that the institutions they created were “branches of Wall Street.”  These organizations began their work in 1945, after a sufficient number of countries had ratified the agreement. John Maynard Keynes played a leading role in the formulation of the Bretton Woods agreements Another objective of this agreement was to create institutions that finance the various national development projects of the Member States and that also conduct an international monetary policy. Therefore, the Bretton meeting was essentially intended for the mere formalization and conclusion of previously adopted agreements.
The Bretton Woods Agreement was reached in 1944 at a summit in New Hampshire, USA, at a place of the same name. The agreement was reached by 730 delegates representing the 44 allied nations that attended the summit. As part of the agreement, delegates used the gold standard In the simplest terms, the gold standard is a system used to understand the value of the currency, and this means that a currency is compared to the value of gold and at what price it can be exchanged for gold. . . .