In output, employment, and profits, thereby generating political pressures for protection

The United States as well as the UK became the world’s largest debtor nations.

These and a number of other factors led to the crisis of the Bretton Woods Monetary System.

The Jamaica Monetary System (JS) was agreed upon at the conference of the International

Monetary Fund (IMF) in Kingston (Jamaica) in 1976, which led to the establishment of a new

E x hange system. The floating exchange rates based on a free choice are the core of the JS. This

standard is based on the following principles:

• abolishing the monetary gold parity

• a few key exchange rates (the Deutschmark, the pound sterling, the yen) are available, i.e. the

System is polycentric

• freely convertible currency (exchange) becomes a means of international payments

• there are no exchange rate margins of fluctuations

• the central banks of the nations are not liable to intervene in the exchange markets operation,

But they can exercise currency intervention to stabilize the rate of national currencies

• the IMF observes the nations’ policy in the sphere of exchange rates.

As a result, a system of managed floating exchange rates has come into use. Rates are generally

Set up by market forces, although governments intervene with varying frequency to alter their exchange

Rates.

Under the JS, there exist a number of exchange rate systems: fixed rate of exchange, floating