Theme 1. Currency, currency systems, rates of exchange
1.1. Notions of currency, types of currencies, currency systems
Currency (ital. valuta - "price, cost") is the monetary item of country.
The currency system is the aggregate of currency-economic relations, that history were folded on the bases of internationalization of economic communications that fastened by the national legislation taking into account the norms of international law. The national, regional and world currency systems are distinguished.
The national currency system is component part of the money system of country which is relatively independent and goes beyond national scopes.
The world currency system is the fastened by the international agreements form of organization of international currency relations, that were folded on the bases of development of the world system of menage.
Table 1 Basic elements of the national and world currency systems
National currency system
|
World currency system
|
National currency |
Key currencies, international computation currency units |
1. Terms of convertibility of national currency. |
1. Terms of mutual convertibility of currencies. |
2. Parity of national currency. |
2. Compatible mode of currency parities. |
3. Mode of national currency exchange rate. |
3. Regulation of the modes of rates of exchange. |
4. Presence or absence of currency limitations, currency control. |
4. Intergovernmental adjusting of currency limitations. |
5. National adjusting of international currency liquidity of country. |
5. Intergovernmental adjusting of international currency liquidity. |
6. Regulation of the use of international credit facilities of appeal. . |
6. Standardization of rules of the use of international credit facilities of appeal. |
7. Regulation of international computations of country. |
7. Standardization of forms of international computations. |
8. Mode of national currency market and market of gold. |
8. Mode of currency markets world and markets of gold. |
9. National organs which manage the currency relations of countries and regulate them. |
9. International organizations, that carry out the intergovernmental currency adjusting. |
Although the world currency system pursues global purposes and has the special mechanism of functioning and adjusting, she is interlinked with the national currency systems. This communication is carried out through national banks, that serve foreign economic activity, and shows up in the intergovernmental currency adjusting and co-ordination of currency policy of leading countries. Communication and differences of national and world currency systems show up in their elements (tabl.1).
National currency is the basis of the national currency system - set by a law monetary item of the definite state. Foreign currency is the object of purchase-sale at the currency market, is used in international computations, is saved on the bank accounts, but is a legal circulating medium on territory of the given state (except for the periods of strong inflation). With her the linked notion of motto is any circulating medium in foreign currency.
The world currency system is based on the functional forms of world money. A money which serve the international relations name a world (economic, political, cultural). The world currency system is today based on a few national currencies of leading countries (key currencies) and international currency units (napr. SDR). SDR - the international asset intended for non-cash international settlements by a record on the special accounts of countries in the International monetary fund.
One of elements of the currency system characterizes the degree of convertibility (exchange) of currencies on foreign. Distinguish:
free currencies which without limitations are trucked for any foreign currencies. Actually currencies of countries, where no currency limitations of current operations of balance of payments are, mainly industrially developed states and separate countries, that develop are freely considered converted, in which world financial centers were or which took on obligation before MVF not to impose currency restrictions;
partly convertible currencies of countries, where currency limitations are saved;
neconvertovani (are reserved) currencies of countries, where for residents and: nerezidentiv prohibition is entered on the exchange of currencies (tabl. 2).
Table 2
Classifier of foreign currencies
(it is ratified by the decision of the NBU Board from 04.02.98 № 34)
The name of currencies |
Code of currency |
|
digital |
designated by a letter |
|
1 |
2 |
3 |
1. Free currencies which are widely used for realization of payments after the international operations and are for sale at the main currency market of world (1th group)
|
||
Australian dollars |
036 |
AUD |
Austrian shilingi* |
040 |
ATS |
The English pound sterlings |
826 |
GBR |
Belgian franci* |
056 |
BEF |
Greek drahmi* |
300 |
GDR |
Danish crowns |
208 |
DKK |
Dollars Of The USA |
840 |
USD |
Spanish peseti* |
724 |
ESP |
Icelandic crowns |
352 |
ISK |
Irish founti* . |
372 |
IEP |
Italian liri* |
380 |
ITL |
Canadian dollars |
124 |
CAD |
Luxemburg franci* |
442 |
LUF |
Netherlands gouldeni* |
528 |
NLG |
German marci* |
.280 |
DEM |
Norwegian crowns |
578 |
NOK |
Portuguese escoudo* |
620 |
PTE |
Finnish marci* |
246 |
FIM |
French franci* |
250 |
FRF |
Swedish crowns |
752 |
SEK |
Swiss francs |
756 |
CHF |
Japanese eni |
392 |
JPY |
SPZ |
960 |
XDR |
EURO |
978 |
EUR |
2. Free currencies which are not widely used for realization of payments after the international operations and are not for sale at the main currency market of world (2th group)
|
||
Armyansci dramas |
051 |
AMD |
Georgian lari |
381 |
GEL |
Dollars To Hong Kong |
344 |
HKD |
Estonian crowns |
233 |
EEK |
Israel sheceli |
376 |
ILS |
Indian rupees |
356 |
INR |
Kazakhstan tente |
398 |
KZT |
Kirghiz sheat-fishes |
417 |
KGS |
The Couveytsci dinars |
414 |
KWD |
Latvian lati |
428 |
LVL |
Lithuanian liti |
440 |
LTL |
Continuation of table 2
1 |
2 |
3 |
Maltese lyres |
470 |
MTL |
Moldovsci lei |
498 |
MDL |
Novozelandsci dollars |
554 |
NZD |
Polish zloti |
985 |
PLN |
Republics Korea they |
410 |
KRW |
The Russian roubles |
810 |
RUR |
Saoudivsci rials |
682 |
SAR |
Singaporean dollars |
702 |
SGD |
Slovak crowns |
703 |
SKK |
Slovenian tolari |
705 |
SIT |
Turkish lyres |
792 |
TRL |
Francs CFA: |
|
|
- francs of Zahidnoafricanscogo financial society |
952 |
XOF |
- francs of Tsentralnoafricanscogo financial society |
950 |
XAF |
Croatian to the heap |
191 |
HRK |
Chilean pesos |
152 |
CLP |
Czech crowns |
203 |
CZK |
Estonian crowns |
233 |
EEK |
Yuan Renminbi (China) |
156 |
CNY |
Other currencies ** |
|
|
3. Neconvertovani currencies (3-tya group) |
||
Azerbaijanian manati |
031 |
AZM |
Byelorussian roubles |
112 |
BYB |
Bulgarian lions |
100 |
BGL |
Egyptian pounds |
818 |
EGP |
New tayvansci dollars |
901 |
TWD |
Romanian lei |
642 |
ROL |
Turkmenian manati |
795 |
TMM |
Uzbek sums |
860 |
UZS |
all other currencies not attributed to the first and second groups of currencies *** |
|
|
* Are withdrawn from circulation in 2002 |
||
** The courses of these currencies are set by the National bank of Ukraine |
||
*** Currencies of the states, that did not ratify the article 8 of Regulation MNF by the state on 29.05.97. belong |
Within bounds of the operating currency system that currency the country of origin of which took on obligation item is considered converted VIII Agreements about the International monetary fund, which provide for, that the imperious organs of country have a right to inculcate the measures of control on motion of capital and must not limit possibility of the use of the currency or currency of other members of Fund for running payments and are under an obligation to buy out at other members of Fund tailings of facilities in the currency, if they appeared as a result of payments after the current operations.
A lot of countries, including Ukraine, took advantage of transitional positions according to an item XIV, which enable to save separate currency limitations, that operated in the moment of entry in MVF. Ratifying in 1992р. this article, Ukrainian parliament proclaimed aspiration of country to providing of convertibility of national currency.
About tacking of Ukraine to the item To a VIII Regulation of MVF officially was proclaimed 08.05.1997р., and from this time actually international confession of hryvnya happened by currency with current convertibility. Acceptance by Ukraine obligations after this article is by form assertion of international concord, that she will pursue a healthy economic policy, avoiding limitations in realization of payments and translations after the current international operations, thanks to what will be instrumental in effective activity of the multilateral system of international computations.
Reserve is the special category of convertible national currency (key) currency which executes the functions of international circulating and reserve medium is the base of determination of currency parity and rate of exchange for other countries, is widely used for conducting of currency intervention with the purpose of adjusting of course of currencies of participating countries of the world currency system. Within bounds of the Bretton-Voudscoi currency system the status of key currency was officially fastened after a dollar by the USA and pound sterling. Within bounds of the Jamaican currency system a dollar actually stored status of key currency, and in this quality marca German federal REPUBLIC and Japanese ena were used in practice.
Dominant positions of country in world production are objective pre-conditions of acquisition of status of key currency, export of commodities and capitals, in zolotovalyotnih backlogs; the developed network of credit-bank institutions, in particular abroad; the organized and considerable market of the borrowed capitals; liberalization of currency operations, free appeal of currency, that provides demand on her from the side of other countries. An active foreign policy is the subjective factor of advancement of national currency on the role of reserve also, in particular currency and credit.
Status of key currency gives advantages to the country-issuer: possibility to cover the deficit of balance of payments by national currency, to be instrumental in strengthening of positions of national corporations in competitive activity on a market world.
At the same time advancement of currency of country on the role of reserve lays the definite obligations on its economy: it is necessary to support relative stability of this currency, not to apply devaluation, currency and auction limitations.