Currencies are exchanged through the acquisition and salein the foreign exchange market. In itself, the foreign exchange market is a system that provides the necessary socio-economic and organizational moments necessary for trading currencies. The world currency market is, first of all, a competitive market, which means that a large number of participants are constantly present on it. Unlike currency exchanges, where traders earn due to the difference in rates, the market is about the economic relationship between importers and exporters of goods. They are also known as primary market actors, and the formation of the basic supply and demand is exactly in their charge.
As for the above traders, theyconsider currency as a commodity, and carry out currency trading in order to make a profit. It should be noted that this kind of activity is the most characteristic of the modern currency market. Now 9 out of 10 deals - this is exactly buying and selling for the purpose of earning a difference in rates, at the same time, trading operations account for a relatively small market volume.
By classification, the world currency market cancalled multi-level. This means that it consists of national, regional and international markets. At the national level, the means of carrying out operations are banking systems. The regional currency market is the place where the purchase and sale of hard currency, as well as local currencies, is conducted. The three main such markets are continental, and represent Europe, Asia and America. Each of them has several financial centers. The volume of transactions is hundreds of billions of dollars a day. Above regional - the international market, which, in fact, is their totality. Money constantly moves between markets, which is explained by the change in quotations - as a result, at the international level there is always a balance.
One of the basic concepts that operatesthe world currency market, is convertibility. The currency can be freely convertible, partially convertible, or non-convertible. The better this indicator, the more popular is the currency in the markets of different levels. To date, the hard currency is not so much - it's the US dollar, the euro, the Swiss franc, the pound sterling, the Japanese yen and some other currencies. In particular, the Chinese yuan may soon be on the leading positions, but so far this is not due to the specific monetary policy of China - its currency is artificially constrained from strengthening.
SLE is not only freely circulated in the markets of alllevels, but also act as a reserve in most states, along with precious metals. If the currency is partially converted, it rarely goes beyond the regional market. An example of such a currency is the Russian ruble. Due to various reasons, non-convertible currencies can only be used within a certain country. One of the most vivid examples to date is the North Korean won. Closeness of the country's economy leads to the fact that the world currency market does not consider wons as a means of payment.
