Under the Bretton Woods system, countries experiencing large and persistent current account deficits were obliged to

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Under the Bretton Woods system, countries with large and persistent current account deficits were obliged to devalue their currencies. This was done in order to make their exports relatively cheaper and boost demand for them, while making imports relatively more expensive and reducing demand for them. This would, in turn, help to correct the current account imbalance.

Under the Bretton Woods System, Countries Experiencing Large and Persistent