The monetary system of the Western World is based on the agreement on the establishment of the International Monetary Fund (IMF), which was made at Bretton Woods, New Hampshire (USA), in 1944. The two principal purposes of the IMF are to promote exchange stability and to help member countries overcome temporary difficulties in their balance of payments. Under the IMF system, the US dollar is the key or leading currency. Each member country of the IMF undertakes to establish a parity of its currency in terms of gold and the US dollar and to keep fluctuations of the dollar exchange rate- or, more exactly, the spot rate -- within the limits of the band or fluctuation margin. Originally, the band was 2 per cent (1 per cent on either side of the parity); in December 1971 it was widened to 4.5 per cent on either side. The upper and the lower limit of the band are called the upper and the lower intervention point. Each member country’s central bank must, if necessary, buy or sell dollars to keep the dollar rate from falling below the lower or rising above the upper intervention point. In this manner, the other currencies, among themselves, cannot deviate from one another by more than double the fluctuation margin, or 9 per cent. The parities can be changed if need be, but changes in excess of 10 per cent require the approval of the Fund. Parity changes have to be made to correct an imbalance resulting from a permanent improvement or deterioration of a country’s competitive position. If, for example, a country has a lower rate of inflation than the other countries, its exports will increase and its imports decline. The growing demand for the currency of this country will cause its external value to appreciate, but- since under a system of fixed or pegged parities exchange rate fluctuations are limited -- a point will be reached from which the currency will become increasingly undervalued. If, on the other hand, a country has a higher inflation rate than the other countries, the opposite will be true and the currency of this country will become increasingly overvalued. Such an imbalance is further aggravated by a speculative run out of the overvalued currency into the undervalued one．Therefore，it will eventually be necessary to upvalue the undervalued currency and／or to devalue the overvalued one．
　　New Words & Terms
　　establishment n．建立；建立的机构；确立 competitive a．竞争性的
　　leading a．主要的；领先的 external a．外部的，外在的
　　undertake v．承揽；着手；担保 external value外在价值
　　parity n．子价，等价，比价 appreciate v．增值，涨价
　　band n．幅度，范围 peg n．，v．固定，限定；挂钩，钉住
　　intervention n．干预，介入 undervalue v．低估
　　intervention point干预点 opposite a．对立的；完全不同的
　　manner n．态度；方式 aggravate v．恶化
　　deviate v．偏离；绕航 speculative a．投机的；推测的，推理的
　　excess n．余额，超额，过剩 approval n．批准；赞成
　　run n．趋势，动向；挤兑 imbalance n．不乎衡，不一致，失调现象
　　overvalue v．估价过高 upvalue v．高估
　　deterioration n．变质；损坏，耗损
　　Phrases
　　keep from使免遭 in excess of超过
　　deviate from偏离，背离 result from起因于，是…结果
　　Proper Names
　　Western World西方世界 Bretton Woods布雷顿森林
　　International Monetary Fund国际货币基金 New
　　Hampshire新罕布什尔州(美国)
　　Notes
　　1．The monetary system of the Western World is based on the agreement on the establishment of the International Monetary Fund(1MF)，which was made at Bretton Woods，New Hampshire(USA)，inl944．
　　西方的货币制度基于成立国际货币基金所作的协定，该协定是1944年在美国新罕布 什尔州的布雷顿森林制定的。
　　“on the establishment…”介词短语作“agreement”的定语。“which
　　was…”非限制性定语从句，对“agreement”作补充说明。
　　2．Each member country of the IMF undertakes to establish a parity of its currency in terms of gold and the US dollar and to keep fluctuations of the dollar exchange rate—or, more exactly，the spot rate—within the limits of the band or fluctuation margin．
　　国际货币基金的每个成员国都保证基于黄金和美元建立其各自的货币平价，并须把美元汇率即现汇汇率的波动，保持在变动幅度范围之内。
　　“to establish a parity…”和“to keep
　　fluctuation…”为平行结构，作“undertake”动词的宾语。
　　“the spot rate”与前面名词短语“the dollar exchange rate”为同位语关系。
　　 3．The growing demand for the currency of this country will cause让3external value to appreciate，but——since under a system of fixed or pegged parities exchange rate fluctuations are limited—a point will be reached from which the currency will become increasingly undervalued．
　　对本国货币不断增长的需求会提高其对外价值，但既然在固定平价制度下汇率波动有限，那么就应达成一个增值限度并据此来不断低估此货币的价值。
　　“since under…limited”状语从句，表原因。
　　“from which…undervalued”定语从句，修饰“"point”
　　Exercises to the Text
　　I．Answer the following questions．
　　1．When and where was the Bretton Woods Agreement made?
　　2．What is the IMF established for?
　　3．What should each member country of the IMF do?
　　4．What does intervention point refer to?
　　5．What purpose is each member country’s central bank going to achieve by buying or selling dollars?
　　6．When will parity changes be made?
　　7．What will happen if a country has a lower rate of inflation?
　　8．What will happen if a country has higher inflation rate?
　　Ⅱ．Match the words or phrases in Column A with those in Column
　　B．
　　A B
　　1．1eading a．1ack of proportion
　　2．deviate from b．the state of being worse in quality
　　3．imbalance c．most important
　　4．permanent d．get the better of
　　5．deterioration e．increase in value
　　6．decline f．outside
　　7．external g．going on for a long time
　　8．aggravate h．become smaller or weaker
　　9．appreciate i．make worse or more serious
　　10．overcome j．turn away from
　　III．Fill in the blanks with the words or phrases given bellow．Change the form if necessary．

 　　1. Its main feature was a system of fixed exchange rates
　　whose were set in relation to gold.
　　2. The volume of paper money in circulation was always
　　the reserve of monetary gold.
　　3. In 1931, the global depression, heightened by massive
　　flow of capital, forced the collapse of gold
　　standard.
　　4. After WW II, a system of international monetary was
　　formalized in December 1945, when the was set up.
　　5. The price of gold was at US $ 35 a troy ounce.
　　6. At the same time each could also support their exchange rate by buying and selling currencies other than the dollar.
　　7. The fluctuation margin is fixed with a of 4.5 %.
　　8. A nation must at all times combine devaluation with other effective measures to balance its economy, resulting in a lower rate of .
　　9. Although exchange rates fluctuate with supply and demand, the extent to which they are allowed without government is rather limited.
　　10. Rumours have it that the Deutschmark is being
　　IV. Fill in the missing words with the words given. Change the form if necessary.

　　When a country subscribes its to an international institution such the International Monetary Fund or the Bank for Reconstruction and Development, and currency is used by the institution to make a loan to another member , then it is likely to weaken the rate of the country whose currency it is. If, for , D. marks were lent to the UK by the IMF and instead of putting the currency our reserves we used it to our indebtedness，the extra D．marks would find their on to the foreign exchange market，and， the supply of marks will have risen，their value would fall in of other currencies．
　　V．Translate the following sentences．
　　1．Until recently Britain has had a system of fixed exchange rates，established when the IMF was formed in 1944．
　　2．Fixed parity rates are laid down between each individual currency and the U．S．dol1ar，but day-to-day fluctuations around the parity rates are permitted up to a modest extent．
　　3．The monetary system which first gained acceptance and lasted until the outbreak of WWI is known as the Gold Standard．
　　4．It was in l944 when the Bretton Woods Agreement was reached that the U．S．dollar was assigned the central role in the international exchange system．
　　5．Under the Bretton Woods System，the maximum range of exchange rate fluctuation for each participating currency was one percent on either side of its established par value(平价)．
　　6．黄金是国际上公认的支付手段。(recognized，means)
　　7．在布雷顿森林体系下，国际货币制度的主要特点是根据黄金来定比价的固定汇率制。(feature，in relation to)
　　8．国际货币基金组织的目的之一是帮助其成员国克服暂时的国际收支困难。(overcome)
　　9．国际货币基金组织对于是否坚持准则予以监督。(supervise，regulation)
　　10．浮动外汇汇率制度在国际支付中盛行起来。(prevail)