Monetary reserves:

Monetary reserves are currencies held by a government usually in its central bank, in addition to its gold reserves. A shortage of gold in the 1960s led many governments to supplement their gold reserves with monetary reserves. Governments began to hoard U.S. dollars and British pounds which were accepted widely in trade and perceived to be stable in value.

Hard currency:

Hard currency is a currency widely accepted in foreign trade. Soft currency is a currency whose value is uncertain and which is therefore not widely accepted in foreign trade. When developing countries gained their independence from the European colonial powers, they introduced their own currencies, some of which acquired a reputation of being "soft." With few reserves of hard currencies, the newly independent countries found it difficult to import goods and services to spur economic growth.

Shortage of Global Liquidity:

A shortage of global liquidity refers to a condition in which the supply of hard currency or other international reserve assets is insufficient to meet the demands of world trade. During the 1960s, many feared that, if the United States cut back on its imports to correct its burgeoning balance of payments deficit, the diminished stream of dollars flowing abroad would result in an international liquidity shortage.

SDR (Special Drawing Right):

The SDR (Special Drawing Right) is a reserve asset created and distributed by the International Monetary Fund to supplement the reserves of its member countries. SDRs were first created in 1969 to supplement other reserve assets (convertible currencies and gold) used in foreign trade and other international transactions. SDRs cannot be used in payment by private individuals. They exist only as electronic accounting balances and are either retained as reserves or exchanged to settle payments between the IMF and its members or between member countries themselves.

Fixed Dollar Price of Gold:

The dollar price of gold exchange rate was fixed at $35.00 per ounce of gold at the Bretton Woods conference in 1944. The value of other world currencies was expressed in dollars, and therefore by implication was also pegged to gold. Under the Bretton Woods system, anyone could redeem dollars for gold from the U.S. Treasury at the rate of $35.00 per ounce. When inflation began to erode confidence in the value of the dollar, the rush to redeem dollars for gold threatened to wipe out the United States' gold reserves.

Bretton Woods System of exchange rates:

The Bretton Woods System of exchange rates, conceived at Bretton Woods, New Hampshire in 1944, was implemented by members of the International Monetary Fund until the early 1970s. This system provided for "fixed but adjustable" exchange rates (based on the U.S. dollar pegged to gold) and aimed for the unrestricted conversion of one currency for another in settling current payments between member countries. Its purpose was to promote international monetary stability in such a way as to foster the growth of trade, high employment and international prosperity. The system, abandoned in 1971 when the U.S. government was no longer able to exchange gold for dollars at $35.00 an ounce, has been replaced by the present regime of surveillance by the IMF over the variety of exchange rate arrangements chosen by member countries.