Sterling Area (Noun)
Meaning
The group of countries whose currencies are tied to the British pound sterling.
Classification
Nouns denoting groupings of people or objects.
Examples
- Countries within the sterling area are required to follow monetary policies that maintain stability in the value of their currencies relative to the British pound.
- After World War II, many countries that were formerly part of the sterling area began to establish their own independent monetary policies.
- The sterling area emerged in the 19th century, as the British Empire expanded and the value of the pound became a standard unit of exchange.
- When the British government abandoned the gold standard in 1931, several countries within the sterling area followed suit and adopted a managed currency system.
- Countries outside the sterling area are not forced to peg their currencies to the British pound, but may choose to do so as a matter of economic policy.