Lesson 17 The International Monetary Sy stem and Ex change Rate The earliest international monetary system was known as the gold standard under which countries pledged (promised) to change their paper currencies into gold when requested to do so. The gold standard created a fixed exchange rate system as each country pegged (fix挂钩) the value of its currency to gold to establish its par value (平价/票面价值) (face value). For most of the 19th century till the end of the First World War, major trading countries followed this system and the British Pound was the most important currency in international business as a result of the economic, political and military power of the United Kingdom, hence the term sterling-based gold standard. (pound sterling) The pressure caused by the First World War on economy coupled with (together with 连同) the impact of the Great Depression (大萧条) put an end to(结束)the fixed exchange rate system. The Bank of England was no longer able to redeem (赎回，兑换) its paper currency for gold at par value (以面值) (无力将其纸币以平价兑换成黄金) and allowed its value to be determined by supply and demand (market). With Britain abandoning (放弃)the gold standard, there appeared different areas in the world. Some countries pegged their currencies to the sterling( 英 镑 ), some countries to the US dollar and some to the French Franc, forming the “sterling area”, “dollar area” and “franc area”. This period witnessed the degeneration(衰落)of the international monetary system as some major countries vied(vie - compete)to (竞相)devaluate their currencies to make their export goods more competitive.(竞争性贬值) (这一时期，世界货币体系不断恶化，各主要贸易国家竞相将其货币贬值以提高他们出口物...
