Currency content
The basis of the national currency system is the national currency – the monetary unit of the state established by law. International settlements usually use foreign currency – banknotes in the form of banknotes, treasury tickets and coins in circulation and which are a legal means of payment in the territory of the corresponding foreign state, as well as withdrawn and withdrawn from circulation, but subject to exchange for outstanding banknotes; as well as all payment requirements that are repayable in foreign currency; foreign currency balance. From a foreign the currency is closely related to the concept of a motto – any means of payment in foreign currency (beksel, checks, letters of credit). Foreign currency is the subject of purchase and sale in the foreign exchange market, used in international settlements, stored in bank accounts.
You can classify a currency as follows:
Criterion | Type of currencies |
1. By currency status | National Foreign International Regional Eurocurrency |
2. In relation to the country’s foreign exchange reserves | Reserve Other currencies |
3. By mode of application (degree of conversion or reversibility) | SLE Partially convertible (externally convertible, internally convertible) Unconvertible |
4. By type of currency transaction | Contract price currency Payment Currency Loan currency Bill currency |
5. In relation to the rates of other currencies | Strong (hard) Weak (soft) |
6. In material form | Cash Unconvicted |
Based on the principle of construction | “Basic” type Normal |
From the point of view of the regime and the scope of application of the currency of all countries, it is divided into:
SLE is the currency of those countries whose laws do not provide for any restrictions on any type of operations with it, both citizens and foreigners. In the IMF Charter, $ US, pound sterling, euro, yen are classified in this category; Partially convertible currencies – the currency data regime provides for a number of restrictions for certain holders and for some types of operations. Here, the right to exchange without restrictions is granted only to its foreign holders. The currencies of most countries are assigned to this category; Non-convertible currencies – in almost all types of operations, the legislation establishes restrictions. As a rule, this is a currency that functions within one country and does not exchange for other foreign currencies.
There are three levels of convertibility:
elements of convertibility; tools for regulating relations with the world market; the most important elements of a general economic policy.
Convertibility elements include:
flexible market exchange rates governing and reflecting supply and demand; lack of currency restrictions on current and financial transactions; the right of residents to own and dispose of foreign currency; the right of non-residents to carry out operations with the national currency.
World Market Relations Tools:
relevant trade and customs policies; monetary policy (change of exchange and form of support, currency control).
Elements of a general economic policy:
regulation of market relations and state participation in the economy; monetary and budgetary policies: financial balance; anti-inflationary measures; maintaining high purchasing power of the currency.