Palleturibhama - Puku Duradha Kamakeli

From 1870 to 1914 all exchangeable currencies were linked to a gold standard and the rates between them were therefore fixed. This was abandoned at the start of World War I.After World War II a meeting was conferred at Bretton Woods to discuss trade and economic stability at the global level. The International Monetary Fund (IMF) was set up with the mandate of promoting trade and stability between all countries. This time all currencies were pegged to the U. S. dollar which, at the time, could buy an ounce of gold for thirty-five dollars, fixed!The IMF could permit countries to adjust their currency's price under fairly stringent guidelines. In 1971 it became obvious that the US$ could no longer remain pegged to gold so the major trading countries started to adopt a free market valuation of their currencies. Any global pegging was completely abandoned in 1985 and individual countries have to decide on the best way to control their liquidity and their trade by adopting the forex fixing regime that they consider works best for them.It is interesting to note over the last ten years a hardening and a softening of exchange rate pegging. In 1990, developed countries did not use hard pegging at all. In 2001 over fifty percent of them were hard pegging their currencies. Similarly, in 1990, under thirty percent of developed countries could be categorized in the floating forex fixing regime. This grew to over forty percent by 2001.