Classification and types of world currencies

Currencies are classified into several categories and differences that characterize the monetary unit from different aspects.

Often, the appearance of a currency can give an idea of ​​the economic development of a country and its role in global economic life.

Currency is classified according to the following criteria:

• By origin - national or foreign.

National currency is the currency issued by a country. This is the main currency of the state, the exchange rate of which is maintained by the national bank. Foreign currency is a currency other than the national one issued by foreign banks. • Hard and soft - currencies that have a stable exchange rate or constantly change their value, the latter usually include the monetary units of developing countries.

• By use and exchange.

A convertible currency is one that has high liquidity and is accepted in almost all foreign banks. This currency can be bought and sold in every country. There are 17 government currencies in the world that are classified as freely convertible. A partially restricted convertible currency is a currency that is accepted as legal tender in some countries but may be difficult to exchange for another currency.

Non-convertible currency - which is used in everyday life only within one state. • By popularity - how much a currency is in demand in international payments, and how often it is used to create gold and foreign exchange reserves of national banks.

For example, at the moment the most popular currencies are the US Dollar, Euro, British Pound, Swiss Franc, Japanese Yen. The share of these world currencies in exchange trading is about 80%. There is also a classification of currencies according to the degree of influence on global economic life. The stability of the exchange rate in relation to the rest of the world, the nominal price and the provision of the gold and foreign exchange fund. Currently, the most stable currencies are the British pound and the Swiss franc . In addition, reserve currencies are a separate category - the most powerful monetary units that are used to form foreign currency reserves by national banks. When exchange rates change, it is immediately reflected in the economic situation and development of countries around the world.

At the same time, the Chinese Yuan is occupying an increasingly strong position, this is due to the steadily growing Chinese economy and high demand for this currency, since it is in most cases that is used in payments for goods issued in the Middle Kingdom.