Abstract: How do policy makers manage the decline of an international currency? This paper examines British policy towards the pound sterling’s international role in the years 1968-74. Using previously uncited government archival sources, we revisit the view that the ‘sterling agreements’ of 1968-74, bilateral contracts made between the UK and governments holding sterling, formed a successful paradigm shift in British policy, towards deliberately managing sterling’s international ‘retirement’. Our research indicates that there was no settled consensus or strategic direction to British policy in this period, a case of ‘muddling through’. Indeed, when feasible options presented themselves, British officials sought to maximise, not reduce, international sterling holdings.
Keywords: Sterling Area Agreements; international currency; sterling policy; disintegration
JEL Classification: N10, F02, F22, F33.
Cite this paper: Alan de Bromhead, David Jordan, Francis Kennedy, Jack Seddon, ‘Managed decline? Muddling through with the Sterling (dis)agreements, 1968-74’, QUCEH Working Paper Series, Paper No. 23-09 (September, 2023)
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