Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/230328 
Authors: 
Year of Publication: 
2020
Series/Report no.: 
Graduate Institute of International and Development Studies Working Paper No. HEIDWP03-2020
Publisher: 
Graduate Institute of International and Development Studies, Geneva
Abstract: 
This paper provides new evidence on the decline of sterling as an international currency, focusing on its role as foreign exchange reserve asset under the Bretton Woods era. Using a unique new dataset on the composition of foreign exchange reserves of central banks, I show that the shift away from the sterling occurred earlier than conventionally supposed for the countries not belonging to the sterling area. The use of sterling has been described as freely chosen, imposed by the Bank of England or negotiated. I argue that the sterling area was a captive market as the Bank of England used capital controls, commercial threats and economic sanctions against sterling area countries to limit the divestments of their sterling assets. This management of the decline of sterling benefited mostly Britain and the City of London but represented a cost for sterling area countries and the international monetary system.
Subjects: 
Monetary and financial history
Foreign exchange
International monetary system
JEL: 
N24
F31
E58
Document Type: 
Working Paper

Files in This Item:
File
Size
677.22 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.