what is the main cause of the end of bretton woods institutions?? class 10
please do not copy the answer from google
Answers
Answer :
The causes of end of Bretton Woods System were :
• Decline in Economic Power of the USA : From the 1960s, the rising cost of its overseas investments weakened the US's financies and competitive strength.
• End of Fixed Exchange Rates : The US dollar now no longer commanded confidence as the world's principal currency. It couldn't maintain its value in relationship to Gold. This eventually led to the collapse of the system of Fixed Exchange Rates and the introduction of a system of floating exchange rates.
• Changes in the International Financial System : Till the mid 1970s the developing countries had access to easy borrowing from the IMF and the IBRD. But after 1970s, they were forced to borrow from Western Commercial Banks and Private Lending Institutions. This led to debt crisis, lower income and increased poverty.
• Unemployment in the Industrial Countries : The industrial countries were hit by unemployment from the mid 1970s to early 1990s.
• Shifting of Production Enterprise : From the late 1970s, MNCs began to shift production operation to low wage Asian countries like India and China. The developing countries became attractive destination for investments by foreign MNCs competing to capture world market. This stimulated world trade and capital flows.