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Currency and How it Work

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Currency is a for the most part acknowledged type of cash, including coins and paper notes, which is issued by a legislature and circled inside an economy. Currency us utilized as the medium of trade for products and enterprises, Currency is the things which is utilized for the purpose of trade and exchange within the country or between countries. Currency is a valuable asset of a country just because it helps to keep the process of foreign exchange going. It helps encourage economic activity by increasing the market for various goods. And it enables consumers to store wealth and therefore address long-term needs. Every country has just one currency now a days but in previous days there can be various currencies within the same country. Each currency belongs to only one country like Swiss Franc to Switzerland and Rupee to Pakistan but there are some currencies which can be used in several countries like the Euro. Euro is utilized by the many European countries and is only valid for the European countries. It is also seen that a same name of currency for the various countries but with different value like Dollar. Dollar is the currency of USA but we also have the Singapore Dollars but both have different values and system. The currency which stands for a country is the local currency of that country. There are some non-country specific currencies as well. Which means that they are operated on their own, they have their value and they have been run by some company or other organization like online companies but not limited to any country. A few monetary standards, as bitcoin, dogecoin  and other online monetary forms and marked monetary standards are not attached to any nation. Marked monetary standards, similar to aircraft and Visa focuses, or in-diversion credits are esteemed in relationship to the estimation of the items or administrations they’re fixing to.

How Does the Currency Works:

While there are many ways a currency can work or it can run. But the main key point these days is the money which is in coin, or credit cards or the paper. The importance of money is that it is applicable everywhere means the money can be exchanged for everything of your demand and your necessity. In the previous old days we used to have the Barter system that we give something to somebody and exchange it for something else. Like exchanging foo for clothes etc. then we used the metal coins for exchanging of money. As far back as 2500 B.C., Egyptians made metal rings that they utilized as cash. Paper cash didn’t come to fruition until the Tang Dynasty in China, which kept going from A.D. 618-907. But now a days we have credit cards and on top of all that we have Electronic money which is transferred through the electronic means like Western Union and so on. Within the facility of banking it is possible that now the banks can Debit and Credit each other’s money without the hassle of moving from here to there

Exchange Rate Policy:-

While the countries are trading with each other, the definitely need some currency. The currency of one country has some fixed exchange rates to the currency of the other country.  The system of having the fixed currency system is very appropriate and very valuable because it save the confusion of exchanging the currency over different rates. It also give the stability to the currency of one country which means that when the exchange market of new country is less sophisticate than the other, there is going to be no problems of the exchange rates. However some countries can also have the floating rates of currencies. This is that the rules of supply and the demand govern the country exchange and the foreign exchange system. The higher the amount of the currency will be the denomination will be cheaper for the foreign investors and the currency itself more expensive


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