Term "currency" applied in three ways:

1. Currency is the currency of that particular country.
2. Currency These are foreign monetary funds and units of account.
3. Currency- these are international units of account such as "euro", SDR, etc.

Since the task is to promote development, any national currency must have external and internal convertibility, i.e., the possibility of converting into the currencies of other states. Convertibility determines the degree of currency liquidity in international financial markets. Thus, currency convertibility characterizes the quality of the currency. Depending on the degree of convertibility, three groups (classes) of currencies can be distinguished.

1. Freely convertible currency(SLE). Such a currency is freely and without restrictions exchanged for other foreign currencies, i.e. hard currency has full external and internal convertibility.

The scope of hard currency exchange extends both to current transactions (transactions related to the implementation of export-import of goods and services), and to transactions related to the movement of capital, for example, obtaining external loans or foreign investment.

Thus, we can say that a freely convertible currency is the currency of the country in which there are no legal restrictions on any transactions with it.

Freely convertible currencies are the American dollar (USD), British pound sterling (GBF), Swiss franc (CHF), etc.

2. Partially convertible currency(PCI). Such currencies include the national currencies of those countries in which currency restrictions are applied to residents, as well as for certain types of exchange transactions. For example, the Russian ruble is partially convertible.

3. Non-convertible (closed) currency(NKV). This is a national currency that functions only within a given country and is not exchanged for foreign currencies.

The rank of the currency is determined by the International Monetary Fund.

In addition, international trade uses currency units that exist only in non-cash form - clearing currencies.

Clearing currencies- These are currency units of account that exist only in non-cash form and are used only by the countries participating in the payment agreement when making mutual settlements for goods and services supplied.

In the global economy, there is the concept of reserve currencies.

Reserve currency- These are the national monetary funds of the leading countries participating in world trade, which are used for international settlements in foreign trade operations and in determining world prices.

Historically, the original role of the reserve currency was performed by the British pound sterling. This was natural, because industry and trade were actively developing in England. In addition, England had many colonial possessions, where the trade exchange was based on the pound sterling. However, later, due to the rapid development of the United States, their national currency (dollar) began to rapidly replace the pound sterling, acting as the main reserve currency. The role of the reserve currency (USD) was finally assigned to the US dollar in 1944 at the Bretton Woods Conference.

The US dollar is currently the world's main reserve currency. Most of the international settlements are carried out in this currency, world prices for many commodity groups are fixed. In addition, all world statistics are based on USD.

The exchange rate has a great influence on international economic relations. It should be noted that at present the monetary policy of the state can greatly influence the exchange rate. In order to maintain the national currency, the central bank of any country can conduct foreign exchange interventions.

Currency interventions- this is the impact on the exchange rate of the national currency through the purchase or sale of a significant amount of foreign currency by government agencies. For example, the Central Bank of Russia (CBR), in order to strengthen the ruble, can sell part of its foreign exchange reserves on the foreign exchange market.

Exchange rate

Currency parity

Money fulfills the measures of value and means of circulation only within the limits of the corresponding state. Outside of these functions, purchasing power is determined by comparison with foreign currencies, and the external value of money is expressed in units of foreign currencies. When determining the external value of money, the following problems arise: the determination of the currency parity by state bodies; formation of rates in the foreign exchange markets.

Currency parity- this is a legally established ratio between two currencies, which is the basis of the exchange rate. In modern conditions, currency parity is established on the basis of special drawing rights (SDRs). The SDR is the international settlement currency used by IMF member countries.

- the ratio between the monetary units of various countries in terms of their purchasing power to a certain set of goods and services - certifies that on the world market the same product must have the same price in all countries if it is calculated in the same currency. But in the world market, goods are sold and bought for different money, so there must be a certain relationship between currencies. This ratio is expressed by the Kessel formula:

For example, 1 dollar = 1.5 euros, or 1 euro = 0.75 dollars, which means that you can buy the same amount of useful products for both 1 dollar and 1.5 euros.

Both parities are used in setting official exchange rates.

exchange rate is the ratio between two currencies or is the price of one currency expressed in terms of another currency.

The nominal exchange rate is the actual price of one currency in units of another currency. For example, the price of 1 US dollar on the Russian market in January 2002 was 30 rubles, and the price of 1 ruble was approximately 0.33 US dollars.

There are the following types of exchange rates:

• fixed exchange rate- this is the official ratio between the two currencies, established by law;
• floating- is set at the auctions on the currency exchange;
• cross course- this is the ratio between two currencies, which follows from their exchange rate against a third currency;
• current- this is the rate of cash, i.e. cash transaction. According to it, settlements are made within two days;
• forward or the rate of a futures transaction is the rate for calculating a foreign exchange (forward) contract after a certain time after the conclusion of the contract.

The value of the currency is expressed in price, which is determined by the value of the currency in relative units of another currency - national or foreign. The price of a foreign currency is called exchange rate.

To designate currencies when concluding transactions, apply ISO- currency codes. An individual currency code consists of three letters: the first two letters indicate the country, the third - the currency. Examples of ISO codes for some currencies are presented in the table.

Exchange rates are displayed by the pair of currencies involved in the transaction, such as GBP/USD or USD/CHF, where GBP/USD indicates how many US dollars are in 1 British pound (how many US dollars can be bought for 1 British pound), and USD/CHF shows how many Swiss francs are in 1 US dollar (how many Swiss francs can be bought with 1 US dollar).

The currency that is bought or sold, i.e. traded, is called traded currency, and the currency that serves to evaluate the traded currency is quote currency. So, when displaying a currency pair, the first of the indicated currencies is the traded currency, and the second is the quote currency.

Usually, when denoting the exchange rate, the foreign currency acts as the traded currency, and the local currency as the quote currency. This quote is called straight, or appraisal: the price of a certain amount of foreign currency is expressed in variable national units. Such a quotation system is used, in particular, in Switzerland, Japan, Canada. For example, the quote USD/JPY106.4 shows that there are 106.4 Japanese yen in 1 US dollar.

Indirect (reverse) exchange rate quote is the price of a standard unit of local currency, expressed in variable units of foreign currency.

The system of indirect quotations of their currency, in particular, is used by Great Britain and Australia (GBP/USD and AUD/USD). An indirect quote is also used when calculating the euro exchange rate (EUR/USD).

For example, the quote EUR/USD1.23 shows that 1 euro contains 1.23 US dollars.

In interbank currency trading, the bank that quotes the currency usually quotes the bid and ask rates. The buying rate is designated as the Bid rate, the selling rate - Offer(Ask).

With a direct quote, the Bid rate is the rate at which banks buy the traded (foreign) currency and sell the national one. The Offer(Ask) rate is the rate at which the bank sells the traded currency and buys the national one. The amount by which the Bid rate differs from the Offer(Ask) rate is called spread.

The largest volume of transactions made in the foreign exchange market falls on spot transactions. Deals spot all foreign exchange transactions are called, payments for which are made on the second banking day after the conclusion of the transaction. If this day falls on a weekend, the due date (value date) is the next business day. The rate at which spot transactions are concluded is called spot rate.

An example of calculating the value date is shown in the table.

Cross course- this is the ratio between two currencies, which is calculated based on their exchange rate in relation to the rate of a third currency. As a rule, when calculating cross-rates, the US dollar is the third currency. This is due to the fact that the US dollar is not only the main reserve currency, but also the transaction currency in most foreign exchange transactions.

As an example of using cross rates, you can calculate the EUR/YPJ rate using the EUR/USD and USD/YPJ rates:

Currency quote

The process of setting the exchange rate is called currency quotation.

Quote types:

Depending on the location of the exchange, on the country where the currency transaction takes place, there are:

1. direct currency quote. With it, the cost of a unit of foreign currency is expressed through a certain amount of the national currency.

• 1 unit currencies = to units. national currency.
• 1 dollar = 31 rubles.

If the transaction is made in any country;

2. Indirect currency quote. With it, the cost of a unit (i.e., 1 piece) of a national currency is expressed in a certain amount of a foreign currency.

• 1 unit of national currency = X units of foreign currency.
• 1 ruble = 1/28 dollars.

The same quote, depending on the country where the transaction is made, can be direct and indirect.

The exchange rate is quoted in two directions:

• buyer's rate- in accordance with this rate, the bank will buy foreign currency in exchange for national;
• seller's rate- in accordance with this rate, the bank sells foreign currency in exchange for national.

With a direct quote, the seller's rate is usually higher than the buyer's rate.

With indirect quotation, the buyer's rate is higher than the seller's rate.

If the quotation of two currencies is carried out by calculating through a third currency, then such a quotation is called a cross rate.

Currency convertibility is the ability to exchange national currency for a foreign one. It happens:

• full convertibility— exchange without restrictions (dollar);
• incomplete convertibility— the exchange is limited (ruble).

There are no restrictions on the domestic market (purchase of foreign currency for rubles).

In relations outside the country, the Central Bank sets restrictions.

3.5.3. Currency clearing

Clearing is a netting of payments, i.e. a situation where monetary claims (accounts receivable) of the participants are repaid by their own monetary obligations (accounts payable) without the use of real money.

Clearing operations are usually classified according to two criteria: the frequency of conducting and the composition of participants. According to the first feature, clearing is divided into one-time, which is carried out episodically as accounts receivable and payable accumulate, or permanent, carried out periodically, regardless of the state of monetary obligations and monetary claims of the clearing participants. Depending on the composition of participants, clearing can be bilateral or multilateral.

Currency clearing is an intergovernmental agreement on the mutual (non-cash) offset of international claims and obligations based on an agreement between the government of two or more countries. Currency clearing involves the centralization of settlements between the states - parties to the clearing agreement on special clearing accounts opened by authorized banks. This scheme is mandatory for individuals and legal entities whose transactions are subject to the agreement. Importers and exporters, as well as other creditors and borrowers, are not entitled to make mutual settlements other than through currency clearing. Currency clearing is also based on other mandatory elements:

Its volume;

Clearing currency;

Amount of technical loan

Clearing volume refers to the extent to which payments are covered. With full currency clearing, the entire foreign trade turnover falls under this scheme. With partial clearing, non-trading operations (tourism, maintenance of embassies and trade missions, business trips abroad, etc.) are carried out in the usual way - through correspondent accounts.

The clearing currency is the agreed unit of account (currency) in which clearing accounts are maintained. It can be expressed in currency:

One of the partner countries;

Both states;

third country.

Payments or receipts from clearing accounts are made in each of the countries only in terms of national currency at the appropriate rate. Clearing currencies are used exclusively in non-cash form. The source of clearing currencies is mutual lending for the supply of goods and the provision of services by countries participating in the agreements. Clearing currencies are used on the principle that they must be spent in the country where they are earned.

The volume of technical credit (the maximum allowable balance of debt) is necessary to ensure the continuity of settlements; is determined in accordance with the share of the balance of debt in the volume of deliveries. In practice, various methods of regulating the balance of a clearing account are used.

Russia's settlement and credit relations with many countries were previously based on clearing-type payment agreements. Some of the settlements with countries such as China, Egypt and India are still cleared, although by agreement current payments are currently made in freely convertible currencies. The fact is that earlier between the Soviet Union and these countries there were clearing-type payment agreements, and when switching to settlements in freely convertible currencies, clearing accounts were not completely “closed”, and therefore part of the operations of Russia as the legal successor of the Soviet Union is carried out on these accounts.

In order to determine the real ratio of clearing and closed currencies to the ruble and base currencies, in 2000 8 special correction factors were introduced to the official exchange rate am. dollar, Swiss franc, Indian rupee, previously used for clearing with India, China and Egypt. These coefficients are used when determining the accounting value of funds in certain clearing and closed currencies, when calculating the taxable base and the amount of customs payments, but are not used when determining the amount of foreign exchange earnings to be credited to residents' accounts with authorized Russian banks. The sizes of the coefficients, established in 2000, are: am. USD for settlements with Egypt, India and China - 0.9, the Indian rupee - 0.85, the Swiss franc for clearing with China - 0.85. Clearing-type payment agreements (clearings) imply a centralized, mandatory set-off of mutual monetary claims and obligations arising between countries through various economic and other ties.

These payment agreements are built according to a single system and contain the following main elements:

1. The system of clearing accounts - each country provides for the opening of a clearing account, which records all payments and receipts: in the Russian Federation - in the Vneshtorgbank of the Russian Federation, and in the contracting countries - in the National (Central) banks of the respective states.

2. Volume of clearing - clearing accounts reflect all payments and receipts for export-import, transport and other operations specified in the agreements. In some agreements, payment for some goods or transactions in freely convertible currencies is allowed, and such clearings are called incomplete.

3. Clearing currency is the currency in which clearing accounts are maintained; such currency may be the currency of one of the contracting parties or the currency of a third party (most often the US dollar). But in all cases, it is a conventional unit of account that is used by the parties in certain areas specified in these clearing agreements.

4. Currency clauses - the need to include them is dictated by the fact that the clearing currencies are subject to devaluations, and to prevent losses, the agreements provide for currency and multicurrency clauses, according to which the balance on the clearing account, expressed in some clearing currency, is recalculated in case of a change its exchange rate to a harder currency (US dollar) or to several pre-specified currencies (multi-currency clause).

5. Technical credit is mutually admissible lending in certain volumes by each other's countries during the implementation of the agreement; the absolute size of such a loan is indicated (usually about 5 percent of the estimated volume of payments). This loan is revolving (revolving) and is provided free of charge, since the negative balance is formed from one side or the other.

6. Current equalization of the clearing balance - carried out regularly within the agreed timeframe (six months, a year); depending on the methods of repayment of the emerging balance (in excess of technical credit), clearings are divided into:

a) clearing without the right to convert - in this case, the debt is repaid only by the proceeds from the export of goods or the provision of services, for which the party that has a negative balance increases the supply of goods (services), a the other - temporarily suspends until the calculations are aligned;

b) clearing with free conversion - this is when a party that has a negative balance in any amount (in excess of a technical loan) is obliged to repay this balance with a freely convertible currency;

c) clearing with limited conversion - a negative balance formed by any party (supertechnical loan) is repaid in a freely convertible currency if this balance exceeded the amount determined by the parties, or was not repaid within a period previously agreed upon from the moment of its occurrence (for example, 3 months); in these cases, interest is paid on the excess amount at the rates of the world credit market.

7. Final regulation balance-clearing agreements are concluded for a fixed period (3 or 5 years), and sometimes for a year, but with automatic extension, if the parties do not notify in advance (3 or 6 months before the expiration of the corresponding one year period)

intention to terminate the clearing agreement.

In order to finally regulate the negative balance formed by some party, various methods can be applied - additional supplies of goods (services), redemption in a freely convertible currency, transfer of this balance to a third party clearing account (with the consent of the latter).