Nonconvertible Currency

(redirected from Nonconvertible Currencies)

Nonconvertible Currency

A currency that may not be converted into another currency on the foreign exchange market, or that may be converted only in limited amounts. Some countries limit convertibility to prevent citizens from making bad investment decisions in, say, a country experiencing hyperinflation, while a few communist countries issue nonconvertible currencies to protect their citizens from capitalist influences. A nonconvertible currency is generally traded only on the black market. It is also called a blocked currency or an inconvertible currency.
References in periodicals archive ?
118) Seto suggests that worlds with nonredeemable, nonconvertible currencies should be taxed to cash method participants only in the event of real money transactions.
On occasion, some multinationals may be required to use nonconvertible currencies in order to do business in certain localities.