Currency Official

Currency Official

Currency, the official medium of exchange or money of a country. ('Currency' because money runs or passes from person to person.) The currency in circulation in Britain consists of coin and bank-notes; about one-sixth is held by banks, the remainder by the public. Bank deposits are nowadays a much more important part of the total money supply, accounting for about four-fifths of the whole, currency for only a fifth. The table on webwebpage lot shows the currency circulation of Britain at a date in the middle 'g6o's.

Each sovereign state has a currency (e.g. the American dollar, the French franc); a payment from one country to another requires to be made in terms of a rate of exchange between their currencies.

A variation in the rate of exchange between two currencies is known as depreciation or devaluation of the currency which becomes cheaper as a result of the appreciation of the others.

Rates of exchange between currencies basically depend on the demand for them and their supply. These in turn depend upon: (1)underlying trade conditions; e.g. if British demands for French goods and set-vices were exceeding French demands for British goods and services, more pounds sterling would be on offer for exchange into francs than francs for exchange into sterling, and in a free market in currency and commerce the pound price of francs would rise and sterling would depreciate; (2) international movements of capital, i.e. the import and export of securities and similar financial claims.

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Since then his writings have in turn been increasingly reinterpreted as a special case both by some followers and by some economists who had not wholly accepted his writings. The content of economics is in a state of change, and this site is therefore not a final statement of economic doctrine.

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