Smithsonian Agreement:
In March 1971 European Council, the Common Market countries will lead towards economic and monetary union agreed to prepare the Werner Plan. Countries covered by Werner Plan, agreed on among themselves to stabilize the European currency fluctuations. Europe is dwindling among themselves and exchange rate movements of currencies (the snake), Dollar (tunnel) against the stay was relatively large. Therefore, this system "snake in the tunnel" (snake in the tunnel) and took his name. In December 1971, Belgium, Canada, France, Germany, Italy, the Netherlands, Sweden, Switzerland, United Kingdom and the United States consisting of (Groups of Ten) countries gathered at the Smithsonian Institute in Washington DC and the Smithsonian agreement. The essence of this agreement with the US Dollar compared to foreign currencies by 8% value has been reduced. But in a very short time it appeared to be insufficient in exchange rate devaluation of the US dollar. Dollar by 10% on February 12, 1973 against speculative attacks was new devaluation. However speculative movements were so busy, they had to be off exchange markets between 1 March to 18 March 1973. When the exchange markets reopened on March 19, the Japanese and essentially peck European currencies against the dollar. Initially it was thought as a temporary arrangement, a new era - began the flexible exchange rate regime period.
Wednesday, July 8, 2015
Smithsonian Agreement
Smithsonian Agreement:
In March 1971 European Council, the Common Market countries will lead towards economic and monetary union agreed to prepare the Werner Plan. Countries covered by Werner Plan, agreed on among themselves to stabilize the European currency fluctuations. Europe is dwindling among themselves and exchange rate movements of currencies (the snake), Dollar (tunnel) against the stay was relatively large. Therefore, this system "snake in the tunnel" (snake in the tunnel) and took his name. In December 1971, Belgium, Canada, France, Germany, Italy, the Netherlands, Sweden, Switzerland, United Kingdom and the United States consisting of (Groups of Ten) countries gathered at the Smithsonian Institute in Washington DC and the Smithsonian agreement. The essence of this agreement with the US Dollar compared to foreign currencies by 8% value has been reduced. But in a very short time it appeared to be insufficient in exchange rate devaluation of the US dollar. Dollar by 10% on February 12, 1973 against speculative attacks was new devaluation. However speculative movements were so busy, they had to be off exchange markets between 1 March to 18 March 1973. When the exchange markets reopened on March 19, the Japanese and essentially peck European currencies against the dollar. Initially it was thought as a temporary arrangement, a new era - began the flexible exchange rate regime period.
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