Specie commodity standard to exchange rate regime since 1973: A descriptive study of foreign exchange in international trade

Financial transactions involved in international trade can be settled through appropriate medium of payment. Currencies of the countries are different from each other. It increases the need of an effective and efficient system of payment in meeting the financial obligations and to ensure smooth functioning of global trading activities. The system used at international level to facilitate easy and effective payment of international transactions is termed as 'International Monetary System". The primary objective of this system is to control exchange rates and to ensure smooth functioning of international business. Presence and contribution of this system on international finance and trade are substantial. The primary objective of this study is to describe the journey of international momentary system from specie commodity standard to foreign exchange regime since 1973. It is a descriptive study based on data collected from secondary sources. An attempt has made to provide a fundamental clarity about the inception and growth of foreign exchange reserve. Foreign Exchange is the most important aspect involved in international trade or business activities. The journey commenced with barter system at the inception stage had kept on developing to reach an effective procedure of exchange since 1973. At present, we are living in a globalized world equipped with digital and technological advancement.