What is CONVERTIBLE CURRENCY?

A currency that can be freely exchanged into another currency for any purpose, without regulatory restrictions. Convertible currencies are generally associated with open and stable economies, and their prices are typically determined through supply and demand forces in the FOREIGN EXCHANGE market. Also known as HARD CURRENCY. See also CONVERTIBILITY, EXOTIC CURRENCY, NONCONVERTIBLE CURRENCY, RESERVE CURRENCY.

More On This Topic



Link to This Definition
Did you find this definition of CONVERTIBLE CURRENCY helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary