What is the International Monetary System? How Does it Work?The international monetary system (IMS) is a set of rules, conventions, and institutions that facilitate international trade, cross-border investment, and generally the reallocation of capital between states that have different currencies. It should provide means of payment acceptable to buyers and sellers of different nationalities, including deferred payment. To operate successfully, it needs to inspire confidence, to provide sufficient liquidity for fluctuating levels of trade, and to provide means by which global imbalances can be corrected.