convertible currency

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Convertible Currency

A currency that may be exchanged for a foreign currency. Currency convertibility is vitally important in the foreign exchange market; higher convertibility means that a currency is more liquid and, therefore, less difficult to trade. Factors affecting convertibility include the availability of foreign currency reserves in a given country and domestic regulations seeking to protect local investors from bad investment decisions in, for example, a currency undergoing a period of hyperinflation. A few socialist governments even issue inconvertible currencies, such as the Cuban peso, in order to protect their citizens from perceived capitalist infiltration. See also: Inconvertibility.

convertible currency

a currency which can be converted into another currency without special permission from the FOREIGN EXCHANGE CONTROL authorities.
References in periodicals archive ?
The system will be equipped to handle credit limit of current accounts held in freely convertible currencies.
Indian exporters mainly trade in freely convertible currencies, including the US dollar and euro.
Although trade is to be conducted in freely convertible currencies or in currencies mutually agreed upon by the two countries under Article-III of the pact, the trade is functioning mainly under the barter system.
The BIS also served as a platform where central banks could implement and defend the Bretton Woods international monetary system which was based on freely convertible currencies at fixed but adjustable exchange rates.
Hantec Investment Holdings Limited provides leveraged foreign trading services in Hong Kong, including spot and forward foreign exchange dealing and over-the-counter foreign currency option trading in major freely convertible currencies.