A country’s currency is its money either in the form of paper money, coins, bank notes etc. International currencies, represented by their symbols, play a vital role in international trade and are usually exchanged at the prevailing rates.
Currencies vary depending on the exchange rate regime. Floating currencies are market driven and the value of the currency is determined by the supply and demand model, while fixed currencies determine their own exchange rate and are maintained by the government. The US dollar, the euro, the pound sterling, and the yen are a few of the major international currencies prevalent in today’s global trade.
International currencies are identified by their unique 3-digit codes. These codes are designated in accordance with the ISO 4217 standard. Currency symbols are used in business, banking, international airlines and train tickets to avoid any price ambiguity. The first two characters in the symbol are the country code according to the ISO 3166-1 standard, which is also used for national domains on the Internet, and the last number in the currency symbol is usually derived from the name of the currency. For example, the currency symbol for the US dollar is USD, which is a combination of US, which is the country code of the United States and D, derived from the dollar.
However, there are a few international currencies that are not part of ISO 4217 due to their non-independent nature and being a variant of the other currencies. Few of them are Alderney pound, Cook Islands dollar, Jersey pound etc.
Some interesting facts about international currencies:
• Different countries can have the same name for their national currency. For example: The “dollar” is the currency of the United Nations, Canada, Australia, etc.
• Many countries can use the same currency. For example: the euro is the official currency of 16 of the 27 countries in the European Union.
• A country can use another country’s currency as legal tender, or as a payment to settle a debt.
• Each international currency has a main currency unit, 1 and a fractional currency, usually at 1/100. For example: 100 cents = 1 dollar.
• There are few currencies without any smaller units, ie the Icelandic krona.
To make international payments, it is easy to learn international currencies and their symbols.