Skip to main content Accessibility help
×
Hostname: page-component-7c8c6479df-ws8qp Total loading time: 0 Render date: 2024-03-28T20:39:43.274Z Has data issue: false hasContentIssue false

Part II - Accelerating the Retreat: Sterling in the 1960s

Published online by Cambridge University Press:  04 May 2010

Catherine R. Schenk
Affiliation:
University of Glasgow
Get access

Summary

The reduction of sterling's international role as a reserve currency was an underlying feature of British policy throughout the 1960s, although no effective way was found to achieve this until the Sterling Agreements of 1968. The crumbling of the pegged exchange rate system, multilateral efforts to replace or reform it and the reorientation of Britain's external focus from empire to Europe and the United States all underlay the development of sterling policy. The great turning point seemed to be the dramatic devaluation of sterling in 1967, but in the end it was EEC membership that prompted the public acknowledgement that the reserve role of sterling would be actively reduced as a matter of official policy. Internally there is clear evidence that voices at the highest level of the Treasury and the Bank of England had come to this view at the beginning of the decade, but there seemed little scope to achieve this in the pegged exchange rate regime. Successive British governments pursued a strategy of gathering multilateral support to reduce the risk of a sudden diversification of global reserves away from sterling, which allowed a fairly smooth reduction in sterling's share of global reserves to a mere 7 per cent by 1970.

As an international commercial currency, sterling's relative position also declined. This process was most closely related to the United Kingdom's relative decline in world trade, but it was also a by-product of continued and intensified exchange controls on the international commercial use of sterling during the 1950s and 1960s.

Type
Chapter
Information
The Decline of Sterling
Managing the Retreat of an International Currency, 1945–1992
, pp. 117 - 118
Publisher: Cambridge University Press
Print publication year: 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×