The gold standard in forex.. convertibility of national currencies into gold which serves as the unit of reference is to become effective global
The gold standard is a monetary system based on convertibility of national currencies into gold, which serves as a reference unit.
It became effective on a global scale in the 1870s.
It became effective on a global scale in the 1870s.
Under this standard, gold was exchanged into local currency in all participating countries, and it has helped stabilize exchange rates worldwide.
The gold standard also favored price stability and had a corrective effect on the balance of payments, since the money was closely linked to the size of the gold reserves held by central banks. Malfunctions due to an increase in the amount of sterling in circulation and the outbreak of the First World War in 1914 should result in the end of the gold standard, at least in its original form.
The gold standard also favored price stability and had a corrective effect on the balance of payments, since the money was closely linked to the size of the gold reserves held by central banks. Malfunctions due to an increase in the amount of sterling in circulation and the outbreak of the First World War in 1914 should result in the end of the gold standard, at least in its original form.
Britain, France, Germany and forty other countries have tried to restore the system in 1925, but their experience was unsuccessful because of the international situation in the 1930s.
