Plaza Agreement - Investment & Finance Definition
An agreement made in 1985 by the United States and four other industrial countries (the G5) that the dollar was too strong and that they wanted other currencies to appreciate against the dollar. The Plaza Agreement states that some further orderly appreciation of the main non-dollar currencies against the dollar was desirable, which told the foreign exchange market that the G5 intended to intervene in the market. Six weeks later, the Plaza agreement had the desired effect of pushing the dollar down more than 10 percent. The G-5 countries are the United States, Japan, Germany, France, and the United Kingdom.