The international monetary system is the structure of financial payments, settlements, practices, institutions and relations that govern international trade and payments around the world.

The monetary system based on money.For centuries, the main instruments for settling international payments obligations have been precious metals like silver and gold. Beginning early in the nineteenth century, gold and silver begun to be supplanted by paper money, starting with the British pound in the 19th century and United States dollar since the middle of the 20th century. During the First World War, most countries suspended the gold standard

Following the Second World War gold regained some of its previous role returning as a reserve currency for official central bank settlements though not as a payment instrument as was the case under the gold standard. In 1971, the United States rescinded its guarantee to exchange US dollars to gold, and gold's role as an official payment instrument came an end. Today, the US dollar serves as the de facto international medium of exchange, store of value and unit of account. In other words, it serves as the world's money. Gold has relegated to a secondary status as merely a reserve currency (i.e. a store of value for central banks) and as another metal traded on the world's commodity markets.

In light of this paragraph, explain the following:

1.The development of World Monetary System

2.The effect of monetary system on the international settlement payment system.

3.Explain the development of monetary system in you country.