Basic Concepts of the Monetary System and its Features

Monetary System - a set of monetary and credit relations, established as a result of economic activity and market development, as enshrined in the treaty and legal standards. This kind of money relations that arise in the functioning of the money in the international circulation.

Money, serving international relations, called the currency. Depending on how widespread certain principles and rules of monetary relations, foreign exchange system may be national, regional or global.

National monetary system is formed as part of the national monetary system, which regulates the payment of money of the country with other countries.

Key elements of the national monetary system:

    The national currency;

    National regulation of international monetary liquidity;

    Regime of the national currency;

    National regulation of foreign exchange restrictions and terms of convertibility;

    Regime of national currencies and gold markets;

    National authorities for foreign exchange regulation (legislative bodies, the central bank, Ministry of Finance, etc.).

The emergence of the global monetary system - the result of the appearance of appropriate settlement between participants in the world of payments due to the development of commodity production, money and international economic relations - cooperation and division of labor.

The main elements of the global and regional currency regimes:

    Kinds of money, serving as international payments and reserve funds;

    Interstate regulation of the international monetary liquidity;

    Interstate regulation of exchange rate regimes;

    Inter-state regulation of foreign exchange restrictions and terms of currency convertibility;

    Mode is the world's currency markets and gold;

    International monetary and credit institutions engaged in interstate regulation of currency relations (International Monetary Fund (IMF), European Monetary Institute).

Any national currency has external and internal reversibility, i.e., the possibility of conversion into the currency of other countries. Convertibility determines the degree of liquidity of financial markets.
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