| Currency is divided into the following components:
* Currency system of the State and also monetary units of this system;
* Foreign currency;
* Balance amount
Foreign currency:
а) Cash, i.e. currency notes, which are in circulation and are legitimate mode of payment in foreign state and also currency notes, withdrawn or to be withdrawn from circulation but can be exchanged for currency notes (banknotes, coins, treasury notes);
b) Non-cash, i.e. means in accounts, expressed in currency notes of foreign state
Legal mode of payment - currency notes, which in accordance with legislation of given state, are considered mandatory to accept for repayment of debt within the territory of given state.
Restriction on use of currency notes as legitimate mode of payment can be established depending on the sum or from type of payment.
Two main requirements are set to foreign currency: authenticity and fitness for use as currency.
Classification of currencies:
Many currency classifications exist in science, in particular: With respect to state - issuer:
* National;
* Foreign;
* Collective (For example - Euro)
With respect to exchange possibility into other currency:
* Easily convertible;
* Partially convertible;
* Unconvertible
With respect to parity of exchange rates:
* Strong / Solid (i.e Stable against its face value and to exchange rates of other currencies);
* Weak / Soft
With respect to validity period:
* Constant;
* Temporary
Real unit i.e, fulfilling the function of money directly or conditionally, for example, ECU (European Currency Unit) is assigned depending upon the actual existence.
Convertibility of currency:
Judicial criteria for convertibility of currencies:
- Presence of market rate of exchange, existence of currency stock exchange (foreign exchange markets), flexible exchange rate, reflecting real parity between supply and demand;
* Absence of standard established restrictions on currency operations;
* Right of resident and nonresident to freely own and dispose the currency, including make any operations |
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