During the Great Depression of the 1930s, countries attempted to
shore up their failing economies by sharply raising barriers to
foreign trade, devaluing their currencies to compete against
each other for export markets, and curtailing their citizens'
freedom to hold foreign exchange. These attempts proved to be
self-defeating. World trade declined sharply, and employment and
living standards plummeted in many countries. This breakdown in
international monetary cooperation led the IMF's founders to
plan an institution charged with overseeing the international
monetary system - the system of exchange rates and international
payments that enables countries and their citizens to buy goods
and services from each other. The new global entity would ensure
exchange rate stability and encourage its member countries to
eliminate exchange restrictions that hindered trade. The IMF was
conceived in July 1944, when representatives of 45 countries
meeting in the town of Bretton Woods, New Hampshire, US, agreed
on a framewo