CBSE · Class 10 · Social Science · History: The Making of a Global WorldExplain the significance of the Bretton Woods Conference and name the twin institutions established by it.

The Bretton Woods System was an international framework designed to preserve economic stability and full employment in the post-World War II industrial world. Its rules were agreed upon at the United Nations Monetary and Financial Conference held in July 1944 at Bretton Woods in New Hampshire, USA. To achieve its goals, the conference established two key institutions, often referred to as the 'Bretton Woods twins': the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (popularly known as the World Bank). The IMF was set up to deal with external surpluses and deficits of its member nations, while the World Bank was established to finance post-war reconstruction. The system was based on fixed exchange rates, where national currencies were pegged to the US dollar at a fixed rate.