To discuss: The way agreement BW had an effect on the capability of the foreign exchange rate in order for free fluctuation.
Explanation of Solution
During the period of 1944 to 1971 the agreement BW has given notice for the exchange of a currency for another currency that has to be fixed with the narrow bands for a specific rates with the help of the government intervention. The agreement lead to a situation where certain currencies are valued more and the other currencies are undervalued. This situation was addressed by the S agreement in 1971. Under this agreement majority of the countries has allowed the dollar to be devalued and the boundaries between where the rate of exchange fluctuates from 1% to 2.25%.
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