in the world today operates Jamaican currency system, agreement on which was signed in Jamaica in Kingston in early 1976.Its administration is completely abandoned the principle of the gold standard and legalized Free Floating (floating) exchange rates.The mechanism of inter-state and national impact on the formation of exchange rates has been significantly modified.This system is not based on monetary systems of individual countries (including the US) - it is based on the principles of law laid down the interstate.
adoption of the new exchange rate system has its prehistory.In the late fifties and early sixties of the XX century for the United States, a period when more and more of their balance of payments turned out to be negative, increasing the amount of dollars for the country's borders, and gold stocks have become depleted.The United States, according to the Bretton Woods agreement, have been forced to meet the growing demand for gold the central banks of other countries.And when you consider that the gold the United States were forced to sell at a fixed price of $ 35 per ounce, it is clear that this gradually led to the erosion of the gold reserve.
Cancel the gold standard, which was initiated in 1971 became Richard Nixon, and installing the extent possible fluctuations in the value (nominal) currency against the dollar in the range of 2.25% led to significant volatility in the currency markets.Bretton Woods system was not able to maintain and increase this interval to 4.5%, and in 1972, in the spring, the United States announced a 10 per cent devaluation of the dollar.
Japan in early 1973 announced a floating rate of the national currency, but somewhere in a month did it and the EU.Thus, the "floating" exchange rate regime from now unofficially became predominant, so that increased volatility of the world currencies.
Jamaican currency system has put the beginning of the law of free exchange rate fluctuations.Since 1978, it entered into force on the IMF's updated charter that enables member countries the flexibility to maneuver, in particular:
- members of the fund are exempt from the establishment of currency parities and the right to use "floating" mode of currency exchange rates;
- market rates between the currencies with the established parity may fluctuate in the range of 4.5% of it;
- countries that chose to fix the parity of its currency, may choose to go to a "floating" exchange rate regime.
Thus, the Jamaican currency system to provide the members of the IMF to choose:
- set currency "floating" exchange rate;
- have or keep a fixed unit of account of the IMF in SDR (special drawing rights), instead of the introduction of the "gold standard" or other possible units of account;
- establish solid relations of its currency (bind) to other currencies: one or more.
But the possibility of the parity in gold completely ruled out.
among countries with "floating" exchange rates, it is possible to note the United States, Canada, Switzerland, Japan, Greece, Israel, the UK and many others.Often central banks of these countries with the sharp fluctuations still maintain exchange rates.That is why the "floating" exchange rates referred to as "managed" or "dirty".In general, exchange rates in developed countries are in a group or alone, "swimming".
There are also own regional monetary system, such as EBU, which was originally used in the new unit of account of the ECU based on a basket of currencies of the countries which are party to the agreement.In 1999, the ECU was replaced by the Euro.
However, Jamaican currency system has a need for further reform, which is needed to improve the exchange rate mechanism of the world, a source of instability in the national and world economies.
