Inconvertibility

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Related to Currency Inconvertibility: Blocked currency

Inconvertibility

The inability of a local currency to be exchanged for another currency. Often includes transfer risk.

Inconvertibility

The state in which a currency may not be exchanged for a foreign currency. A few socialist governments issue inconvertible currencies such as the Cuban peso in order to protect their citizens from perceived capitalist infiltration. Most of the time, however, domestic regulators may deem a foreign currency inconvertible in order to protect local investors from bad investment decisions. For example, regulators may deem a currency going through a period of hyperinflation as inconvertible; that way, investors do not make investments in that currency as they are likely to soon be worthless. See also: Foreign exchange.
References in periodicals archive ?
broad areas of political risk: currency inconvertibility, expropriation,
Specific risks identified by respondent firms are related primarily to monetary factors such as high inflation rates, currency devaluation, and currency inconvertibility. These concerns exist for Mexico as well as for the rest of Latin America.
When exporting to overseas markets where credit and financial information often is not as readily available as it is in the United States and business and accounting practices differ, credit managers face the risks of currency inconvertibility, economic and political instability and adverse government actions in addition to customer insolvency.
The products are created to help countries attract more investments and to promote domestic trade by providing insurance that mitigates against sovereign risks and specifically, currency inconvertibility and exchange transfer, expropriation, trade embargoes, non-honouring of contracts and payment default risks among others.
The general insurer said in a statement thatiIn addition the policy will protect businesses against unfavourable currency inconvertibility.
Combine this with the possibility of changes in political regimes, political violence (think Arab Spring, Orange Revolution, Occupy Wall Street), government interference, expropriation, transfer risk or currency inconvertibility, and international expansion becomes downright treacherous.
private investment in less developed countries by reducing risks, especially political risks (including currency inconvertibility, expropriation, political violence, and terrorism), for U.S.
With cross-border M&As becoming more common, companies involved with transactions in emerging markets--and their financiers--face risks such as the expropriation of assets, currency inconvertibility and acts of violence.
International policies generally cover losses due to political instability, currency inconvertibility, embargoes, acts of war and natural disasters.
Currency Inconvertibility: Protects investors if local currency cannot be converted into hard currency of if investors are prevented from transferring funds from the host country.
The risks of expropriation, currency inconvertibility; political violence and a host of related noncommercial risks loom large.
investors against expropriation or currency inconvertibility. The U.S.