What is meant by the Bretton Woods Agreement?

The meaning of the Bretton Woods Agreements:
(i) This agreement was signed between the world powers in July 1944 at Mount Washington Hotel situated in Bretton Woods in New Hampshire, USA.

(ii)The Bretton Woods conference established the International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations.

(iii)The International Bank for Reconstruction and Development (popularly known as the World Bank) was set up to finance postwar reconstruction. The IMF and the World Bank are referred to as the Bretton Woods institutions or sometimes the Bretton Woods twins.

(iv)The post-war international economic system is also often described as the Bretton Woods system. The IMF and the World Bank commenced financial operations in 1947. Decision-making in these institutions is controlled by the Western industrial powers. The US has an effective right of veto over key IMF and World Bank decisions.

(v)The international monetary system is the system linking national currencies and monetary system. The Bretton Woods system was based on fixed exchange rates. In this system, national currencies, for example the Indian rupee, were pegged to the dollar at a fixed exchange rate. The dollar itself was anchored to gold at a fixed price of $35 per ounce of gold.