Currency
BeginnerA currency is the specific form of money used in a country or region, such as the euro, the US dollar or the Indian rupee. It is issued by a government or central bank and used to price goods and settle debts.
Money is the general idea; a currency is a particular version of it. Each currency has its own name, symbol and smaller units, such as 100 cents to a dollar. Within its home country, a currency is usually legal tender, which means it must be accepted for paying debts.
Some currencies are shared by several countries. The euro, for example, is used across many European Union member states. Others are used in only one country.
When people or businesses trade across borders, they often need to swap one currency for another. The price of one currency in terms of another is called the exchange rate. If one euro buys 1.10 US dollars today and 1.05 next month, the euro has become weaker against the dollar, and European travellers to the United States get fewer dollars for each euro.
A currency's value depends heavily on confidence in the economy and in the central bank that manages it. High inflation, political instability or large government debts can make a currency lose value quickly.
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