Forex Money for Exchange in Currency Bank

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Forex Money for Exchange in Currency Bank
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In the practice of States Treasury or the state central bank control over the currency or the monetary policy from. The central banks have in almost all Western countries a large degree of autonomy , that is, the government can not or only to a small extent or indirectly act on the central bank.

Is a worldwide currency trading and convertible, it is by its convertibility spoken. If a currency deposited by gold and / or silver and is the conversion of notes into the respective metal at any time, so in this context is given convertibility.

Currently, there are over 160 official currencies , but only the U.S. dollar and, increasingly, the euro are considered as international reserve currencies . There are also complementary currencies that are only regionally accepted money as well as the official medium of exchange.

Unbound currencies (such as U.S. dollars or Euros): Not decked with gold, theoretically any enlargeable money, although the actual amount of money is now usually controlled by the interaction of government central banks and private commercial banks. An exchange of cash into gold and foreign exchange reserves at a fixed exchange rate is not possible. Since the abolition of the gold standard for the U.S. Dollar 1971 Currencies are often uncovered. (as "fiat" ) supposedly, although in debt money systems money mostly from credit money results-creation and thus with reverse power pressure from debt , with or surety – with debts of another – can be understood as highlighted.

Many countries have a currency restrictions – set limits for residents and / or non-residents to own and / or operations with currency values. Inconvertible currencies apply only in the country in which they are issued. (For example, mark the GDR was a convertible, as opposed to DM ).

Convertibility facilitates international trade , but it complicates the financial management of the country. The inflow of foreign currency becomes the equivalent of the internal issue of money, which can lead to uncontrolled inflation . On the other hand, currency convertibility can afford to "export" inflation in other countries. To do this, you must pass the resulting domestic inflationary money supply to other countries, for example in the form of loans at low interest.

The Chinese currency ( Renminbi ) might in the face of economic power, decades of economic growth and trade surpluses of the People’s Republic of China a convertible currency or even a reserve currency may be. So far (as of 2011), the political leadership of the country but not the renminbi convertible made, although western industrial states again and again – even in the wake of the financial crisis in 2007 and the sovereign debt crisis in the euro zone – to asking.
Many voices blame China by a special monetary policy to have made ​​its currency undervalued and / or maintained.

Until the abandonment of the gold standard, the metal used to be chosen as the reference for a convertible. Then he imposed the use of U.S. dollar and now, in some countries, the euro begins to be used for this purpose.

There is also a system called currency basket which is basically a convertible, but with reference to more than one currency, for example, the sum of the dollar and the euro divided by two. This system may offer greater flexibility than traditional convertible, though not widely used.

The basket can be assembled according to several different criteria, the most logical to establish a rate of exchange according to the relationship to foreign trade, for example if 40% of the trading is done in the Eurozone is logical that 40% of the basket is formed by the daily trading of the euro.

Basically the currency basket system freezes the situation at a given time, then the relationship varies according to the proportion of floating currencies included in the basket.

Money (the Latin denarius or penny, coin Roman ) medium of exchange is all common and generally accepted by a society that is used to pay for goods ( goods ), services , and any kind of obligations (debts). Currently, the type of money we use in everyday is fiat money.

Money, as we know it today (currency worthless own) must be endorsed or certified by the issuing institution. Currently governments are, by law, who determine what type of legal tender, but are other entities such as central banks ( Central Bank ) and the houses of the coins ( Ceca ), which are responsible , first, to regulate and control the monetary policy of an economy, and second, to create notes and coins on demand and the need for physical money.

Currently the only type of money itself that is legally considered as such, is issued by the central bank (currency), also called legal money , and always be accepted as payment. It is considered that the legal money is the most liquid asset which can convert other assets (goods, services, debts or obligations) and vice versa.

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