Classification and types of world currencies

Currencies are classified into several categories and distinctions that characterize the monetary unit from different sides.

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

Currency is classified according to the following features:

• By origin - national or foreign. National currency is the monetary unit issued by the country. It 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 with a stable exchange rate or constantly changing their value; the latter usually include the monetary units of developing countries.

• By use and exchange. A convertible currency is one that is highly liquid and accepted by virtually all foreign banks. This currency can be bought and sold in every country. There are 17 national currencies in the world that are considered freely convertible.

A convertible currency with partial restrictions is a currency that is accepted as a means of payment in some countries, but its exchange for another currency may be difficult. A non-convertible currency is one that is used in circulation only within one country.

• By popularity - how much the currency is in demand in international settlements, 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. Exchange rate stability relative to the rest of the world market, nominal value, and gold and foreign exchange reserves. Currently, the most stable currencies are the British pound and the Swiss franc . Reserve currencies—the strongest currencies used by national banks to accumulate foreign exchange reserves—also constitute a separate category. Changes in exchange rates immediately impact the economic situation and development of countries around the world.

At the same time, the Chinese Yuan is gaining an increasingly strong position, thanks to China's steadily growing economy and high demand for this currency, as it is used in most cases to pay for goods produced in the Middle Kingdom.