What is currency? Currency of Russia. Currency dollar

The Italian word "currency" in Russian came in the middle of the XVIII century. At first it meant "payment on a bill", but already in the middle of the XIX century acquired a new meaning - "the monetary system of the state, secured by gold." In this article we will tell you what currency is.

General information

Banknotes, coins, treasury notes, which are legal tender and are the basis of the state's monetary system, are called currency. In household vocabulary, this term is most often used as currency of a foreign state. To distinguish these two concepts, the following notation is used:

• A closed currency functions within one state;
• The convertible can be exchanged for the monetary units of another country.

Currency Types

In each country there are national and foreign monetary units. The currency of Russia - rubles that are in circulation, withdrawn from circulation, funds on accounts with banks of the Russian Federation and abroad, which are recognized as a means of payment. The national currency is used for domestic settlements, while the foreign currency is used for international payments. The second is money that is in free circulation or withdrawn from it, but is a means of payment in a foreign country or group of countries. For international transactions, currency exchange is required based on the established rate. This is the price of one currency, expressed in monetary units of another state. The rate is set based on supply and demand in the foreign exchange market. The goods on it are monetary units: rubles, dollars, yen and so on. The exchange rates of national and foreign currencies vary in different directions. The fall in the value of the domestic currency leads to a reduction in the cost of exports and a rise in the cost of imports.

Sustainability of courses

According to the degree of stability, the courses are divided into strong and weak. The hard currency is provided with a gold reserve, is stable to the value of other monetary units. For the strong, the market price exceeds the nominal value. Weak currency is less resistant to the exchange rates of monetary units of other countries. Its market rate is below par. The same currency in practice is strong and weak relative to the currencies of different countries.

Official rates of foreign currencies to the ruble are set by the Central Bank every working day. They come into force on the next business day after signing and are valid until the next order. These data are published on the Bank of Russia website. However, banks have no obligation to buy or sell currency at this rate. For legal entities and individuals such information is used for acquaintance. To find out the exact exchange rate, you will have to use the currency converter. It can be found on the website of any bank.

Characteristics of monetary units

Conditions and sales volumes largely depend on restrictions that are set by the state and are characterized by the convertibility parameter. This is a certain financial regime that allows in the course of foreign economic transactions to exchange a national currency unit for a foreign currency. According to this indicator, the currency in the banks is divided into three groups.

Types of convertibility

The freely convertible currency (JMC) is freely exchanged for monetary units of other countries, as well as for payment means, which are used for settlements in international transactions. In world practice, the main characteristic of turnover is:

• Absence of any restrictions in the exchange;
• Availability of a flexible course.

CRS are used for transfers in the international payment system (CLS). This allows private individuals and entrepreneurs to conduct transactions without exchanging the national currency for any convertible currency.

Having dealt with the issue of JMC, we turn to the question of what a currency is partially convertible and closed (nonconvertible).

The first is a currency with certain restrictions on turnover in a particular region, for some individuals or for several types of transactions. Unconvertible is called a monetary unit, which, for economic or political reasons, the state banned exchanging for the currency of another country.

In the framework of a partially convertible currency, external and internal turnover are distinguished. By the first means the possibility of foreign countries to freely transfer the national currency abroad. Internal means the right of citizens and businesses to buy foreign currency for transactions. To introduce the convertibility, the state must adopt the appropriate law.

Advantages of ICS

Having dealt with the question of what is a currency that is freely convertible, we turn to the question of what advantages this gives the state. To date, the free turnover is determined by the economic power of the country. UCWU allows the state to create favorable conditions for improving the balance of payments, testifies to economic freedom, promotes the development of international competition, as a result of which enterprises are forced to increase production efficiency.

In such circumstances, organizations can receive loans in foreign currency. Foreign economic activity is stimulated: due to reduction of currency risk, exports and imports of goods increase. But at the same time, the rise in price of imports leads to devaluation of the national currency. The introduction of the UCWU involves the state in the system of the international division of labor, increases the inflow of foreign capital, and simplifies the procedure for conducting transactions.

Conditions for the formation of turnover

These include:

• Satisfaction of demand by supply on the market;
• Availability of the necessary quantity of liquid assets;
• Creation of a reserve fund;
• A balanced balance of payments;
• The deficit of the state budget, if any, should not exceed 5% of GDP;
• Conduct a sound pricing policy without distortions, but with due regard for the laws of value;
• A reasonable credit policy with a rational interest rate and purposeful financing;
• The introduction of effective antitrust laws with a view to demonopolizing the economy.

World currencies

Due to liquidity and the impact on the financial market, it is customary to refer to the world currencies seven monetary units:

• Euro;
• U.S. dollar;
• Canadian, Austrian and Swiss dollars;
• Japanese yen;
• Swiss frank.

In these currencies is a greater number of contracts, they are most often traded in the Forex market.

The main features of the world's currency:

• High liquidity;
• solvency;
• Stability of the course.

They are used to create gold reserves. The rates of world currencies are interrelated. When the price of one of them falls, the cost of the other increases. And vice versa.

Most European countries have their own currencies and central banks that regulate monetary policy. In 1996, a monetary union was formed, which by 2014 already unites 18 countries. The European Central Bank controls the territory of the Eurozone. The currency that operates on this territory is the euro. Since 1999, the euro is used for non-cash settlements. Since 2002 - for cash payments. Today, the euro competes with the dollar in terms of turnover and shares in creating gold and foreign exchange reserves.

Another very popular world currency is the US dollar. It is a means of payment in more than twenty countries of the world. The last half-century, the dollar - one of the sources for creating a reserve currency. Immediately after World War II, he pushed out the British pound.

The yen is used for transactions in Asian countries. Calculations in the national currency of Japan are greater than in the dollar or euro.

Approximately 5% of foreign exchange reserves are formed in pounds sterling. The national currency of Great Britain is one of the most stable in the world.

The Australian dollar is very popular on the Sydney exchange.

The Canadian dollar is most often used for settlements on commodity exchanges in the trade of sand, metals and energy resources.

Currency of Russia - CWU

In order for the ruble to become completely reversible, it must be supported by a material equivalent. In theory, the Russian economy, estimated by independent experts at a high level, could become such an equivalent. But in practice, a more realistic option is the provision of the ruble by the state. The launch of a convertible currency, which is not secured by state obligations, as it was with the dollar, will not pass. Euro as a world currency for the time being holds a conditionally state status.

Ensuring the status of the JMC by the state implies that Russia will have to pay for the material resources on the first demand. That is, the ruble mass in the world should not exceed the material security of the country. Given the corruption at all levels of government, it is rather difficult to guarantee.

However, the Russian government is taking all steps to give the ruble the status of the JMC. Recently, the Bank of Russia announced its intention to fully switch to the ruble. About this, other credit institutions, including Sberbank, "reflected" also. The currency of the Russian Federation may be included in the list of the Continuous Linked Settlement Bank in the near future. It is used for the calculation of SVK. The Bank of Russia has already submitted a relevant application to the CLS, but there is no answer yet.

Summary

Money signs issued by one country, but used as a means of payment in other countries, indicate a high level of development of the state. Ideally, banknotes and coins should be backed by the legal status of the country or its national wealth, freely exchanged for the currency of other countries. That's what currency is freely convertible around the world.