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The 1967 sterling devaluation (or 1967 sterling crisis) was a devaluation of sterling from $2.80 to $2.40 per pound on 18 November 1967. It ended a long sterling crisis that had started in 1964 with the election of Labour in the 1964 general election, [1] but originated in the balance of payments crises of the preceding Conservative government. [1]
After the 1967 sterling devaluation increased demand for a higher denomination notes than £10, the Series D £20 note was introduced on 9 July 1970. The note was predominantly purple and featuring a statue of William Shakespeare and the balcony scene from Romeo and Juliet on its reverse.
After a brief period in which the deflationary measures relieved sterling, pressure mounted again in 1967 as a consequence of the Six-Day War, the Arab oil embargo and a dock strike. [17] After failing to secure a bail-out from the Americans or the French, a devaluation from US$2.80 to US$2.40 took effect on 18 November 1967.
The UK government devalued the pound sterling in November 1967 from £1 = $2.80 to £1 = $2.40. This was not welcomed in many parts of the sterling area, and, unlike in the 1949 devaluation, many sterling area countries did not devalue their currencies at the same time. This was the beginning of the end for the sterling area.
Sterling crisis may refer to: 1931 sterling crisis, emergency measures during the Great Depression; 1949 sterling crisis, devaluation; 1967 sterling crisis, devaluation; 1976 sterling crisis, IMF loan; 1992 sterling crisis ("Black Wednesday"), depreciation
In 1967, there was an attack on the pound and a run on gold in the sterling area, and on 18 November 1967, the British government was forced to devalue the pound. [41] U.S. President Lyndon Baines Johnson was faced with a difficult choice, either institute protectionist measures, including travel taxes, export subsidies and slashing the budget ...
The alternative to devaluation, however, was a series of austerity measures designed to reduce demand in the economy in order to reduce imports, and to stabilise the balance of payments and the value of sterling. [21] Callaghan (second left) with finance ministers in The Hague, 1966
In support of the Bretton Woods system and to exert control over the exchange rate of gold, the United States initiated the London Gold Pool and the General Agreements to Borrow (GAB) in 1961 which sustained the system until 1967, when runs on gold and the devaluation of the pound sterling were followed by the demise of the system.