Different countries in the world have their own currencies and they can be in the form of paper, coins or bank notes. It is interesting to know that each currency has a code that helps to distinguish it from other currencies. The codes of currency play a significant role as they assist in international trade and exchange of currencies. The currencies of different countries have a unique 3 digit code, which is set according to ISO 4217 standard. The first two characters in the code are set as per ISO 3166-1 standard and the last digit is a derivative of the name of the currency. For example INR is the code of Indian currency which stands for Indian Rupee where ‘R’ is the derivative of Rupee.
These codes set a standard for trade and currencies are exchanged according to the predominant rates. US Dollar, Euro, Pound Sterling, and Yen are the major international currencies. International trade cannot be carried out without the currency codes. These facilitate other transactions as well. Some important facts about international currencies are as follows:
- Names of some currencies are same in different countries like Dollar is the name of currency of USA, Australia and Canada. These countries are thus distinguished by their codes.
- Currency of one country can be used by another country as a legal tender for payment of debts or as a method of making other payments.
- Certain currencies like Euro can be used across several countries of the world. The Euro is used in 16 countries out of the 37 countries of Europe.
- The currencies of countries that are not independent like Cook Island dollar, Jersey Pound do not have their distinct codes.
- Every country has a main currency unit which can be further subdivided into smaller units like paisa of the Indian rupee.
The international currencies and their codes are very important because they assist in the smooth transactions and trade. Person carrying trades in two countries say India and Australia must be aware about the currency and codes of both the countries. With increasing trade activities between countries, the significance of currencies and their codes is gaining with each passing day.
International Business Directory
Every country or nation has a different flag, a national symbol, language, currency, etc. These differences have been incorporated to create certain distinctions between these countries. The currency of a nation is its money, which is in the form of paper, coins or bank notes. These different currencies have a unique 3 digit code, which distinguishes them from other currencies. This code has been set according to ISO 4217 standard. The first two characters in the code are set as per ISO 3166-1 standard and the last digit is a derivative of the name of the currency. The currencies are used for international trade and transactions and are exchanged according to the predominant exchange rate. These currencies and their codes are very important for international trade as they set a standard for the trade. For example, if India is to trade with Canada, then it would be essential to know both the currency codes, so that the trade takes place according to the prevailing exchange rate between the Indian Rupee and the Canadian Dollar and there is minimum discrepancy. US Dollar, Euro, Pound Sterling, and Yen are the major international currencies.
Distinctive features of International Currencies
- Some countries have same name for their national currency. For example, ‘Dollar’ is the currency of United States Of America, Australia, Canada, etc. Though the names might be same, the codes of these currencies are entirely different.
- There are several currencies, which can be used by many countries. For example, Euro is used in 16 of the 37 countries in Europe.
- One country can use the currency of another country as a method of payment. It can be used as a legal tender or for payment of debts.
- Every international currency has a main currency unit. The main unit is usually divided into a fraction to create smaller units of currency. For example, 1 Rupee=100 Paisa.
- Some currencies do not have their distinct codes as they are not independent currencies. For example, Cook Island dollar, Jersey Pound etc.
It is important to know the different currencies and their codes as they are very helpful in undertaking trade activities, making transactions and payments etc.