The world monetary system and its importance in the modern world

 Under the currency system in the modern world refers to the circulation of money in developed countries and monetary relations with other States. The world monetary system was not immediately adopted, the form in which we are accustomed to see it.

Originally this system was developed spontaneously, one would not attempt its regulation. At that time it was based on the gold standard, but gradually she began to be regulated. In the end, she came to the conclusion that it is based on paper-credit money.

The Modern world monetary system has gone a long way of development, which largely repeated the steps that had to pass and of the national monetary systems of individual States. For example, original any national monetary system based on gold standard, gold was the key to the stability and acted as a payment method. Later, the use of gold coins refused using bullion as collateral. At the last stage of these systems came the use of paper and credit money, here is the main role goes to credit funds.

Monetary system in the international arena

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

However, at the same time there was the development of various subsidiary credit money. Initially they are special bills of exchange or checks. All this expressed a debt of a particular country to another state or the international community.

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The World monetary system in the twentieth century

 To the beginning of the twentieth century the world situation has begun to change, first of all this was expressed in economic and trade relations of States. In this situation, the global monetary system ceased to meet all the requirements of such a relationship. Needed reforms that could bring this system to a new level.

National and world monetary system was to become less natural, so needed a reliable control. In regard to the 30-th years of the state have switched from using standard gold bullion to paper-credit relations. The system made some additional opportunities for economic regulation.

Strongly influenced the situation of 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 spread the influence of the dollar.

In 1944 for the first time, it was decided to formalize the principles of the world monetary system. At the UN conference recognized the gold basis system, the dollar and the pound sterling called the major currencies of the world. Then was established the international monetary Fund. All this helped to make the world a more convertible currency and this helped to resolve many relationships and get rid of the chaos that prevailed then in the international economy.

Later, However, the situation began to change, Europe and Japan could outpace the United States in gold reserves, so shaken the economic basis underlying the international monetary system. The dollar began to fall, and many countries refused to maintain the exchange rate of their national currencies at par with the dollar. The United States conducted the devaluation of the dollar, and many States have moved to floating rates.

Since 1973 the price of gold started to depend on international markets and the world monetary system is freed from the influence of gold. Such relations still persist, although changes are periodically made which would meet international requirements.