Bretton woods system - IMF and WB - Monetary order to govern monetary relations among nations
Bretton woods system of monetary management established the rules for commercial and financial relations among the world's major industrial states in the mid 20th century.
Bretton system was a fully negotiated monetary order intended to govern monetary relations among independent nation-states.
The delegates from all 44 Allied nations of World War 2 signed the bretton woods agreements on July 1944.
The delegates set up a system rules, institutions (International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank), and preocedured to regulate the international monetary system.
It's an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar and the ability of the IMF to bridge temporary imbalances payments.
On August 15, 1971, the United States unilaterally terminated convertibility of the dollar to gold. As a result, "the bretton woods system officially ended and the dollar became fully 'fiat currency,' backed by nothing but the promise of the fedural government." This action, referred to ask the Nixon shock, created the situation in which the United States dollar became the sole backing of currencies and a reserve currency for the member states.