Under the Bretton Woods system, each currency's value was to be fixed relative to other currencies. What was the mechanism for maintaining these rates?

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The mechanism for maintaining fixed exchange rates under the Bretton Woods system was through government and central bank intervention in the currency market. This meant that if a currency's value was deviating too far from its fixed rate, the government and central bank would buy or sell the currency in order to bring it back to the fixed rate. This was known as "pegging" the currency to a fixed rate.

Under the Bretton Woods System, Each Currency's Value Was to Be