The international monetary system is a complex necessary for the settlement of claims, the repayment of debts between states, the creation of new trade and economic relations. During its existence, the system has gone through several stages in its development.
Historically, national monetary systems were the earliest to emerge. Their appearance was associated with the need to exchange national monetary units for foreign ones in the trading system that arose between different states.
The international monetary system is a form of organization of monetary relations between countries. It functions independently, serving the movement of goods. It is a community of various elements that are united by regular interaction.
The main functions and tasks of the international monetary system
Functions are divided into primary and secondary. The first group includes:
- Liquidity. This is the availability of the required number of international reserve assets to allow payment of obligations.
- Regulation. The system allows you to restore and correct the situation if dysfunctions of the balance of payments have appeared.
- Control. Thanks to the use of precision mechanisms, confidence is created in the correct operation of the entire system.
Secondary functions are represented by the possibility of coordinating the exchange rate regime, determining the income from the issue of currency. In any case, the main goal is to create those conditions for production that could ensure the efficient and smooth operation of all economic systems, the conduct of international relations and the optimization of various foreign economic relations.
Features of the international monetary system
The main element is the national currency. At the end of the last century, baskets of currencies appeared, which began to perform the function of counting units necessary to track exchange rate fluctuations.
The SDR (Special Drawing Rights) is the official reserve currency under the IMF Constitution. SDR is a basket of currencies, which includes various monetary units of different countries. The decision to release it was made back in 1970.
Course calculations are carried out every day, every month. They are based on:
- national currency rates;
- the ratio of various monetary units in relation to the US dollar;
- indices of the rate of American money in relation to the subsequent and previous periods.
What does the international monetary system consist of?
The system is based on currencies of different types, a set of banks and various international institutions, on the work of which currency relations depend. Currency is understood as a monetary unit that can be used for international settlements.
Since currencies are equated to each other, this process is called a rate. This is an expression of the value of one unit in the banknotes of another state. The exchange rate is in constant dynamics as it is influenced by various factors. The economic is of paramount importance. They include the state of the country's balance of payments, the ratio of various interest rates, and the movement of domestic prices.
Stages of development of the international monetary system
Over the decades of its formation, this world financial institution has gone through several main stages. Each of them had its own characteristic features:
- Parisian monetary system. Under her, all the functions of money were performed by gold. Thanks to this, there was a decrease in risks in the construction of international economic relations.
- Genoese. It was formed in 1922. The priority was the currency that could be exchanged for gold bars. The system was canceled due to the fact that there was a direct dependence on gold mining.
- Bretton Woods. Formed in 1944. It included a ban on the free purchase and sale of gold, while the material was recognized as the only unit of account.
- Jamaican. Adopted in 1976 with the participation of the IMF member countries. One of the main principles was the loss of its functions by gold. The IMF was able to control exchange rates.
- European. It arose in 1979, when the countries of Western Europe were united. One of the main stages was the creation of a monetary union and the introduction of a single currency - the euro.
Thus, regional monetary systems differ from international ones in that they include a limited number of member countries. All elements are divided into currency, financial structures and international settlements.
