Plaza Accord

The Plaza Accord was an agreement signed between the US, Japan, West Germany, France and the UK at the Plaza Hotel in New York in 1985.

During the early 1980s, the value of the US dollar rose significantly against those of its major trading partners. The Ronald Reagan government was looking to reduce the rate of inflation, which led the US Federal Reserve to increase US interest rates sharply. As a result, more people bought dollars to take advantage of the higher interest rates on offer, pushing up its value.

This created problems for US businesses the high dollar made their goods more expensive on world markets, while making imports cheaper in America. Some companies began lobbying politicians to shield them from foreign rivals.

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