Importance of International Currencies and Their Codes

money of a nation is its money either in the form of paper money, coins, bank notes etc. International currencies, represented by their codes, play a vital role in international trade and usually are exchanged as per the prevailing rates.

Currencies vary depending on their exchange rate regime. Floating currencies are market pushed and the worth of the money is determined by the supply-need form, while fixed currencies have their exchange rate set and maintained by government. US Dollar, Euro, Pound Sterling, and Yen are few of the major international currencies common in current world trade.

International currencies are identified by their rare 3 digit codes. These codes are set as per ISO 4217 standard. money codes are used in business, banking, international airline and aim tickets to avoid any ambiguity in relation to the price. The first two characters in the code are the country code as per ISO 3166-1, which is also used for national domains on the internet and the last digit in the money code is usually derived from the name of the money. for example, money code of United States Dollar is USD, a combination of US, which is the country code of United States and D, derived from Dollar.

There are, however, few international currencies which do not form a part of ISO 4217 owing to their non-independent character and being a variant of other currencies. A few of them are Alderney pound, Cook island dollar, Jersey pound etc.

Few interesting facts about international currencies:

• Various countries can have the same name for their national money. Ex: “Dollar” is the money of United Nations, Canada, Australia etc.

• Many countries can use the same money. Ex: Euro is the official money of 16 of the 27 countries in the European Union.

• A country can use the money of another country as legal tender, a payment for settlement of a debt.

• Each international money has a main money unit viz., 1 and a fractional money usually at 1/100. Ex: 100 Cents = 1 Dollar.

• Few currencies exist without any smaller units viz., Icelandic krona.

To make international payments it is handy to know international currencies and their codes.

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