44 Allied nations from 1 July to 22 July 1944 to sign agreements for the establishment of International Bank for Reconstruction (IBRD, the World Bank), the International Trade Organization (ITO), and the International Monetary Fund (IMF). A system of exchange rate management was deployed, which was working till 1970. Currency conversion was mandatory by the member countries of the agreement, which became functional only in 1959, culminating in the setting of IMF and IBRD. As per the agreement, the member nations needed to consult one anther to reach a unilateral decision on global monetary developments, impacting the economies of all nations. The purpose behind the creation of IBRD was to take quick action for post-war reconstruction, to reach political stability, and promote peace through making of programs for reconstruction and development .
Thus, the major industrial nations of the world came closer by framing rules for introducing a system of monetary functions of businesses among the allied powers of the World War II. By 1945, the IBRD an associate of World Bank Group currently and IMF started functioning after the ratification of the agreement by a good number of member countries. As per the agreement, in each member country’s monetary policy it was mandatory to maintain the exchange rate of its currency around a fixed value with the flexibility of 1 percent up or down against gold. It was essential to clear the imbalances in payments by the IMF. The system couldn’t work beyond 1971 due to increasing financial glitches and one-sided termination of conversion of dollar into gold by the United States. This action of the United States created furors in the international economy, and a new situation surfaced making the dollar “reserve currency” for the member nations that signed the agreement .
The worldwide depression of