Have you ever thought of that how many currencies are there across the world? Or which amongst the world currencies are most traded ones? Well, you need not wonder any more! Here we have shared some interesting facts about the current currencies of the world but before that let us see first that what is a currency and why is it important?
Whatever money one uses entirely depends on where he/she is living or is planning to travel. In total the United Nations recognizes about 180 currencies circulating across the world. Though the number of total independent countries is more than 195 along with dozens of dependent territories, the number of total currencies is lesser because some of the countries use foreign currency as they do not have their own money.
So, you may find that the European currency i.e. Euro is used in about 35 independent states as well as the overseas territories, USA and the ten other foreign countries use the United States Dollar, the East Caribbean dollar is used as a currency in 6 Caribbean nations in the Central African franc-in 6 African states and West African CFA franc-in 8 African states.
The most traded currency in the world is US Dollar holding about 47% share of the global payments and also acquires 87% of the total everyday turnover of the forex market. The second in the race of most traded currency is Euro that has about 33% of everyday transactions and also accounts for the 28% share in the international bank payments.
British pound dating back to its existence since 8th century is one of the oldest currency across the world. The newest currency of the world that was officially accepted on July 18, 2011 is the South Sudanese Pound.
What is Currency?
Currency, in general, refers to the type of money that is circulated within an economy for purchasing goods as well as services.In simpler terms, the word currency refers to a form of money that is used for the circulation amongst the public throughout the country. At present, the currency normally comprises of both the hard money i.e. coins as well as the soft money i.e. paper.Currency within a country is generally maintained and issued by a governing authority and is called Fiat money. This implies that the currency value is not determined by the material used in making it instead it is determined by the value it represents as per the issuer and the economy.
Why is currency important?
Apart from the several obvious advantages of the currency that forms the basis of trade i.e. buying and selling, the currency is also supposed to set the standards of value, which in turn leads to smooth and easy functioning of the trades as compared to the barter system.Currency is also known to be a store of value. This suggests that currency is can also be stored and then later it can be brought out by retaining the maximum out of it, if not the entirety of its value.
What are the World’s Biggest Currencies?
There are about 8 currencies that are recognized as the most traded as well as the strongest of all. Here you can find them with their corresponding symbols.
- U.S. Dollar (USD) – symbol $
- Euro (EUR) – symbol €
- Japanese yen (JPY) – symbol ¥
- British pound (GBP) – symbol £
- Swiss Franc (SWF) – symbol ₣
- The Canadian dollar (CAD) – symbol $
- Australian/New Zealand dollar(AUD/NZD) – symbol $
- South African Rand(ZAR) – symbol R
Important Information about Currency
The value of the currency rises up and falls down regularly across the world. Currencies get affected by every little thing i.e. whether the leader of the country says something amusing for the current trading price of oil or anything else.The values may show a faster variation in their rise or fall i.e. a way faster than what you might have expected for like as while many currencies and the Canadian dollar plunged by around 15% due to the reduction in prices of oil during December 2015.
From the banking point of view, all these currencies are known to be strong and stable but this is not the case with the perspective of traveling. The most widely used and favored currency for international travel is the US dollar, British Pound and the Euro.As already mentioned above, around two dozens of territories as well as the nations along with Ecuador and Zimbabwe make use of the American dollar as its currency. This usually happens in the case where the country’s currency becomes quite unstable and one is forced to look for building up of a stable economy.
Dollars and Sense
Names and Symbols do not have much meaning as the value does. For e.g.- Mexicomight use the $ symbol for denoting a Mexican peso usually written as $MEX but it still gets you only 20 pesos to the dollar or the then exchange rate. Apart from this also because a country such as Cambodia makes use of theAmericandollardoesn’t at all mean that the dollar would buy you the same in Cambodia as that it would buy in America. You may get around the two-course meal and a drink under $10 in Cambodia inside a mid-range restaurant, just because the cost of living there is lower in comparison to that of the USA.
There are around 180 currencies in the world that are recognized by United Nations and it is important for the country to have currency because it is an important asset in key requisites of what makes a nation as independent and self-sufficient. Every nation across the world has trade relations with other nations and this is done through the exchange of currency, traveling overseas requires an exchange of currency. Conducting trade using the barter system is no more applicable in this era and so we make use of currency now. Currency is of great importance because the value of one currency in terms of the other assists in determining the nation’s economic condition and also the people’s well being there.