Plaza Accord
About Plaza Accord
The Plaza Accord was an agreement in September 1985 by the G5 nations (US, UK, France, West Germany, and Japan) to depreciate the US dollar. The dollar had risen 50 percent since 1980, hurting US exports. The agreement was signed at the Plaza Hotel in New York. The dollar fell 25 to 50 percent against major currencies over two years. The Plaza Accord contributed to the Japanese asset bubble by making Japanese exports more expensive and prompting loose monetary policy. The Louvre Accord of 1987 attempted to stop the dollar decline. The Plaza Accord is the most successful coordinated currency intervention in history and a rare example of major economies aligning on exchange rate policy.
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