Bretton Forest System
After the collapse of the gold bracelet, the value of national currency lost the stable foundation, and the violent fluctuations of exchange rates make international monetary order confusion. In 1944, the meeting held in Bretton Forest in Bretton, decided to implement a fixed exchange rate system after the war, that is, an adjustable focused exchange rate system. It is the price of the US dollar to maintain a fixed price, and the currency between countries is determined between the US dollar, which is the statutory exchange rate specified by the International Monetary Fund. In order to maintain foreign exchange parity under the Bretton forest system, the International Monetary Fund and Member States have made many efforts, but due to the continuous crisis of the US dollar, the currency status of Member States has also changed, and the International Monetary Fund stipulates Foreign exchange parity often changes. In February 1973, after the second depreciation of the US dollar, the fixed exchange rate collapsed under the Bretton forest system. In this situation, most countries have a decouplement with the US dollar and implement a floating exchange rate system. However, in order to maintain the stability of exchange rates, countries still hook their own currency with some kind of currency or a basket of currency to determine foreign exchange parity.
International Monetary Fund to identify foreign exchange parity mainly:
1 Through a cooperative arrangement, the price is determined, mainly It is a member of the European community. The community's national currency is implemented, that is, the member states determine the foreign exchange parity of their currency, form a parity network, which is equipped with each other to maintain the stability of the exchange rate, and the external floating is implemented. In 1978, the European Community has established a European monetary system and created European currency units. In this system, the national currency is determined between foreign exchange parity between the European currency unit. In addition, it also uses a small price network established by two or two pairs between the monetary pairs of each member states). The combination of the system and basket system has enabled countries foreign exchange price to achieve the purpose of stabilizing the exchange rate.
2 The system that pinchouts special funds is implemented, that is, the foreign exchange parity of the currency and special funding rights, and to determine the parity of the national currency with other countries.
3 is implemented to peg the foreign exchange parity of a freely redemption.
4 neither nails in a basket of currency, but also adjusts foreign exchange parity based on a series of index changes.
For developing countries implemented direct foreign exchange control, foreign exchange parity is determined by official determination, all foreign exchange transactions are carried out in this exchange price, and it is easier to maintain foreign exchange parity.
However, for countries where currency can be exchanged freely, it is not easy to maintain foreign exchange parity. In order to maintain foreign exchange parity, all countries generally conduct artificial interventions on foreign exchange markets. Specific methods are to establish a foreign exchange level fund. When the market is appreciated, the currency is sold, and the foreign currency is sold. The foreign currency acquisition of the currency is sold when the currency is depreciated in the market. Although this method can maintain the relative stability of exchange rates, it is easy to bring various hazards. If the currency is severely depreciated, even if the foreign exchange level is not necessarily to save the decline, it has caused huge losses to the national foreign exchange reserves. Conversely, if the currency is highly appreciated, it can sell the above-selling coins, but it has increased the amount of currency issuance and exacerbation. Therefore, countries generally adjust foreign exchange parity in the right time according to the actual changes.