When Britain left the gold standard in September 1931, it was policy to encourage the chief suppliers of raw materials to peg their currencies against the pound in order to facilitate trade. Those colonies that had currencies pegged to the pound immediately followed Britain off the gold standard. By the end of 1932 the unplanned result was a 'sterling area' of currencies linked to the pound in which exchange controls were discouraged. During the 1930s other non-Empire countries, most of which had Britain as a major trading partner, joined the sterling area - notably the Scandinavian and Baltic countries, and Argentina.
By 1933 the pound and franc, which was still on the gold standard, had risen in relation to the dollar and were near the accepted parity value. The agenda for the World Monetary and Economic Conference of June 1933 included tariff reduction and the stabilisation of exchange rates. Britain and most of the colonies were, however, unwilling to return to the gold standard or to peg the pound against any other currency. Britain and its colonial partners reaffirmed the Ottawa tariff policy.
Following the departure of the US and France from the gold standard stable, exchange rates were assisted by the 'tripartite stabilisation agreement' of September 1936. Britain, France and the US agreed not to devalue their currencies without consultation, which, in the absence of a formal system, enhanced stability in exchange rates between the major currencies.