That initiative paid immediate dividends when the first oil shock hit a few months later and begat historic episodes of international cooperation such as the Plaza Agreement
a decade later.
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
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
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.
In 1984, the United States initiated the Plaza agreement
to knock the dollar down.