Currency – What is Currency?

What is Currency?
Definition of Currency: It can be explained as a type of currency issued by the Central Bank or the government. This type of currency is utilized as a legal tender and forms an important basis of the trade. Currency includes several form of money consisting of notes and coins. There are some cultures in which the currency refers to an object having superficial price and can be replaced for another objects. In the subject economics, currency refers to the substantial aspects of a money supply of the nation. Another part of the money supply of a nation contains the finances that are deposited in different banks. In the past, wealth in the type of currency has dominated the society. Coins made of silver and gold had inherent value when compared to the true commodity cost of the monetary unit. These were utilized for exchanging the value. On the contrary, the modern currency is regarded worthless. The dollar was attached with Gold till 1971, when the President Nixon totally eliminated the Gold Standard therefore permitting the money to float in free manner like the other currencies. In most of the cases, every private bank has a control over the production and supply of the own currency. To assist trading between the countries, these banks agree on rates of exchange, which are the costs at which the currencies can be replaced. Currencies are classified into two groups named as fixed currencies and floating currencies depending on the exchange rate system.