Plaza Accord

(redirected from Plaza agreement)
Also found in: Wikipedia.

Plaza Accord

Agreement among country representatives in 1985 to implement a coordinated program to weaken the dollar.

Plaza Accord

An agreement between the United States, the United Kingdom, West Germany, the United Kingdom, and Japan in 1985 to gradually devalue the U.S. dollar with respect to other currencies. The countries did this by selling dollars from their foreign currency reserves. In the years leading up to 1985 the dollar had become quite strong and was causing significant current account deficits and was making American exports less competitive globally. As a result of the Plaza Accord, the dollar depreciated more than 50% in an orderly fashion over the following two years. Interestingly, the Plaza Accord was the first major currency agreement involving Japan.
References in periodicals archive ?
In the following, we analyse the current currency situation, review the logic behind the Plaza agreement and compare it with the current one, especially highlighting differences between Japan in the 80s and China at present.
The dollar plunge was the steepest since the Plaza Agreement of 1985.
It wouldn't be surprising if Baker--master orchestrator of the Plaza agreement and the Madrid conference--finds it compelling.
Leaving aside the Smithsonian flirtation in 1973 with a new set of fixed rates, which proved short-lived, the other main examples of currency intervention were the Plaza agreement of 1985 and the Louvre accord of 1987.
Bankers still remember the Plaza agreement clearly.
In 1984, the United States initiated the Plaza agreement to knock the dollar down.
The discussion then reverted to the question of intervention as a means of influencing the exchange rate, with the suggestion that it would be valuable to have further comments from Lord Lawson on the effectiveness of intervention with particular reference to the Plaza Agreement in 1985 at which the major industrial countries agreed to intervene to reduc e the US dollar exchange rate.
But the Plaza Agreement, enacted in 1985, changed the whole picture.
They concluded that "substantial exchange rate changes since the Plaza Agreement will increasingly contribute to reducing external imbalances and have now brought their currencies within ranges broadly consistent with underlying economic fundamentals.
Since the Plaza Agreement of September 1985, the exchange rates of the major industrial countries have changed dramatically.
In addition to the Empire State Plaza agreement, the city and state have agreed to encourage the use of private developers for new state-occupied buildings and, alternatively, for the state to provide PILOTs for other state-owned facilities.