During the 1960s the fixed exchange rates within the Bretton Woods system were subject to increasing pressure, and in 1971 the USA announced that the dollar could no longer be encashed for gold. Later that year the fluctuation bands within the system were widened from +/-1 per cent to +/-2.25 per cent, and the currency system had thus in reality collapsed. For a brief period, however, the system was maintained with the new fluctuation bands, but in the following years the participating countries opted out one by one, and allowed their currencies to float vis-à-vis the dollar.
Last update: 05/09/2011
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Collapse of the Bretton Woods system
