Currency Converter

Currency refers to a system of money in general use within a particular country or economic context. It serves as a medium of exchange, a measure of value, and a store of value. Here are some key points about currency:

Types of Currency

1. Fiat Currency:

   • Government-issued money that is not backed by a physical commodity (like gold). Its value comes from the trust and stability of the issuing government (e.g., USD, EUR).

2. Commodity Currency:

   • Money that is backed by a physical commodity. Historically, currencies like gold or silver served this purpose.

3. Cryptocurrency:

   • A digital or virtual currency that uses cryptography for security and operates on decentralized networks (e.g., Bitcoin, Ethereum).

Functions of Currency

1. Medium of Exchange:

   • Facilitates transactions for goods and services.

2. Unit of Account:

   • Provides a standard measure of value, making it easier to compare prices.

3. Store of Value:

   • Maintains value over time, allowing individuals to save and defer consumption.

Currency Exchange

• Exchange Rate: The rate at which one currency can be exchanged for another. It fluctuates based on market conditions.

• Foreign Exchange Market (Forex): A global marketplace for trading national currencies against one another.

Importance of Currency

• Economic Stability: A stable currency promotes trade and investment.

• Inflation Control: Central banks manage currency supply to control inflation and maintain economic stability.