definitions Gold exchange standard

Gold exchange standard

An exchange rate system used from 1925 to 1931 in which the United States and England were allowed to hold only gold reserves while other nations could hold gold, U.S. dollars, or pounds sterling as reserves. A monetary system that sought to restore features of the Gold Standard in the 1920s and again in the Bretton Woods System, while economizing on gold. Instead of money being backed directly by gold, central banks issued liabilities against foreign currency assets (mostly U.S. dollars under Bretton Woods) that were in turn backed by gold.