International Monetary System (International Financial System)

Every country has its own monetary system to facilitate trade and investment. The Central Bank of the country administers monetary policy. In Nepal, it is Nepal Rastra Bank

International business needs an efficient international monetary system. International monetary system aims to promote trade and investment across countries. Its concern is the system of exchange rate of any two countries.

In ancient times, the value of the metal contained in coins determined exchange rates. Gold standard was in wide use in the 19^th century. Free flow of gold was allowed among countries. The demise of gold standard created large variations in exchange rates.