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 really big change on the horizon in regards to international reserves is the arrival of the Chinese yen as a fully convertible currency that floats and is not managed actively by the People's Bank of China.
Cuba introduced the convertible currency in 1994 when Cubans started receiving remittances from relatives in Florida to help them weather an economic crisis triggered by the break-up of Havana's benefactor, the Soviet Union.
Not everyone receives convertible currency from abroad, something which is not illegal but which at times creates irritating inequalities and privileges in a country that does its utmost to supply vital services free of charge to the entire population.
But unlike a standard forward contract, delivery on an NDF is made not in renminbi, but in an equivalent amount of a convertible currency, such as U.
It also established a set of criteria for the headquarters: a stable government, a convertible currency, good communications, good living conditions, attractive climate and a city which would be suitable to foreign--African and non-African--employees.
Difficulties arose because India does not have a convertible currency, and Quovadx encountered problems with letters of credit issued on behalf of Infotech.
Today Kazakhstan has a fully convertible currency, single-digit inflation, and a sound banking system.
The Hong Kong market has a number of things going for it - people there speak English, it has a free port, convertible currency and the fifth largest foreign reserve in the world.
Utilising the Euro as a strong convertible currency and with the availability of a 300m consumer marker, everything is in Africa's favour.
New Discoveries and its software licensee, will provide a regulated online gaming service, allowing players access to graft-free government, fully convertible currency, competitive odds and prompt payment of winnings for the first time.
Cuba opened the sectors operating directly in foreign currency to international competition and established decentralized financing of convertible currency.