Nations were committed to maintaining the parity value of their cur-
rencies within 1 percent of parity. The various central banks were to
achieve this goal by buying and selling their currencies (usually against the
dollar) on the foreign exchange market. When a country was experienc-
ing difficulty maintaining its parity value because of balance of payments
disequilibrium, it could turn to a new institution created at the Bretton
Woods Conference: the International Monetary Fund (IMF). The IMF was
created to monitor the operation of the system and provide short-term
loans to countries experiencing temporary balance of payments difficulties.
Such loans are subject to IMF conditions regarding changes in domestic
economic policy aimed at restoring balance of payments equilibrium