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Optimal currency area |
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Optimal currency areaThe optimal grouping of regions or countries within which exchange rates should be held fixed. First defined (as "optimum currency areas") by Mundell (1961).Similar MatchesCurrency risk sharingCurrency risk sharingAn agreement by the parties to a transaction to share the currency risk associated with the transaction. The arrangement involves a customized hedge contract embedded in the underlying transaction. Common currencyCommon currencyA currency that is shared by more than one country. Thus the currency of a currency area. Currency basketCurrency basketThe value of a portfolio of specific amounts of individual currencies, used as the basis for setting the market value of another currency. It is also referred to as a currency cocktail. Composite currencyComposite currencyA currency defined as a specified combination of two or more currencies, normally existing only as a unit of account rather than as a physical currency. Examples include the SDR and the ECU. Foreign currency futures contractForeign currency futures contractStandardized and easily transferable obligation between two parties to exchange currencies at a specified rate during a specified delivery month; standardized contract on specified underlying currencies, in multiples of standard amounts. Purchased and traded on a regulated exchange on which margins are posted. Further SuggestionsCurrencyCurrency speculation Currency hedge Currency Eurocurrency deposit Currency board Reserve currency eurocurrency European Currency Unit Currency diversification Currency in circulation Currency selection Virtual currency option Convertible currency Eurocurrency market Base currency Currency swap Currency risk Comptroller of the Currency Currency appreciation Eurocurrency Currency Exchange Risk Currency put option Currency Board Over-valued currency |
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