Before the war, the international gold standard had been anchored to the gold parity of the pound sterling. After 1914, though it could no longer be freely converted at home, sterling remained nominally attached to gold and in New York the exchanges continued to function. For the Entente Powers it was vital to maintain the value of their currencies against the dollar. They couldn’t credibly promise to repay their dollar debts if the lira, the rouble, the franc or sterling were depreciating violently.
