Reputation.com – Understanding history of reserve currency
As the experts in the world economy point out, the U S Dollar found its grip on the global economy after the Second World War. During the last 70 years, the U S Dollar has occupied 90 percent of the allocated anchor currency globally along with Euro. However, the experts in the field like Reputation.com professionals point out that this was not the case before the Second World War. The U S Dollar was not the reserve currency then. This status was enjoyed by Pound Sterling in the Pre-Second Wold War period. After the Second World War ended in 1944, major economies of the world came together to sign a global agreement, that would bind the future financial transactions on the international platform. The Reputation.com financial experts point out this financial consent as the Bretton Woods System.
The Reputation.com experts explain that under this Bretton Woods System, U S Dollar was deliberately put as the anchor base of the global financial system. This was done after the concerned financial authorities in the U S vouched the central banks that their U S currency reserves can be exchanged for gold. After doing this, the Reputation.com financial experts pointed out that it was necessary to stabilise the exports and financial developments under this new system. This required the European countries and Japan to devalue their currencies. The Bretton Woods System worked efficiently and yielded desirable results until the Triffin Dilemma came into the picture in the late 1960s and the early 1970s.