Floating exchange rates (March 1973-present)
The new float was supposed to be as short-lived as the August-December
1971 float had been. However, a rather long "temporary" period ensued.
Negotiations over a new set of pegged rates were expected to be long and
difficult. In addition, many economists believed that floating rates would be
more palatable than fixed rates, given the problems of the previous years. In
late 1973, once the temporary floating exchange-rate system was found to be
operating quite nicely, it was decided to continue it indefinitely.
The present system of exchange rates is really a hybrid system. Most of
the currencies of the world belong to developing countries, and most of these
are pegged to one of the major currencies of the world. As of September 1982,
37 currencies were pegged to the U.S. dollar; 13, to the French franc; and 5,
to other currencies. Thirty-nine currencies, including those of Sweden and
Austria, were pegged to a weighted basket of major currencies.
Floating exchange rates (March 1973-present)The new float was supposed to be as short-lived as the August-December1971 float had been. However, a rather long "temporary" period ensued.Negotiations over a new set of pegged rates were expected to be long anddifficult. In addition, many economists believed that floating rates would bemore palatable than fixed rates, given the problems of the previous years. Inlate 1973, once the temporary floating exchange-rate system was found to beoperating quite nicely, it was decided to continue it indefinitely.The present system of exchange rates is really a hybrid system. Most ofthe currencies of the world belong to developing countries, and most of theseare pegged to one of the major currencies of the world. As of September 1982,37 currencies were pegged to the U.S. dollar; 13, to the French franc; and 5,to other currencies. Thirty-nine currencies, including those of Sweden andAustria, were pegged to a weighted basket of major currencies.
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