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 ?
Several Havana residents interviewed by this journalist have many doubts about holding on to savings in CUPs because of their uncertainty as to what the fixed parity between the Cuban peso and the convertible currency will be on Day Zero.
Repatriation of revenues and profits outside of Jordan, in a convertible currency, earned by virtue of the investment;
O'Driscoll Jr., a Cato senior fellow, reminds us that liberalism went hand in hand with a convertible currency under the classical gold standard.
The pound would be a fully convertible currency in an independent Scotland and the UK Government couldn't stop us using it.
The sum of the Bank's convertible currency paid-in capital, total
In my view, there is a stronger signal that China is a key player but also an important partner in the composition of this C* easily convertible currency of the IMF," Lagarde said.
Two, India's unwillingness to make the rupee a fully convertible currency also means it must use a mutually acceptable currency.
"Bahrain has a more liberal economy, it's competitive, value-oriented, has the lowest tax, 100pc ownership in business and real estate and has a freely convertible currency.
Tunisia plans to ease some restrictions on the movement of capital in preparation for a planned switch to a fully convertible currency in 2014.
Mayaleh's next big effort is to complete the liberalisation of the current account and move to a fully convertible currency exchange system.
They 'guarantee to investors of each contracting party freedom of transfer of payments relating to an investment in freely convertible currency'.
an advantage: it had the only convertible currency, and so could issue domestic currency to pay its import bills.