what is bretton woods system.explain with an example
Bretton Woods System is one of the earlier system of exchange rate wherein, the monetary authorities of different countries (other than USA) maintained fixed exchange rate among their currencies and the USD (dollar) by intervening in the foreign exchange market. In case the value of a currency is lower as compared to the value of USD, then the monetary authority of that country will buy its own currency in exchange of USD in the foreign exchange market, thereby, pulling up the price of the currency. On the other hand, if the value of currency is high as compared to the value of USD, then the monetary authority will sell its own currency in exchange of USD. This would push down the value of country's currency.