An international currency is an existing monetary unit that is used for most international currency transactions and payments. In addition, it can be used as a reserve monetary system, that is, it can serve as an investment asset. The presence of such monetary standards greatly simplifies the functioning of the interstate economy.

It becomes possible to carry out settlements and purchases without the need to exchange currency every time. In addition, it becomes possible to set fixed prices for goods that are produced and sold in countries belonging to the region where there is a single interstate monetary unit. To date, the main options for international currency are as follows:

U.S. dollar;
Euro;
GBP;
Japanese yen.

In addition, the Swiss franc has been the international currency since 2009. However, he has not yet reached the level of the first four. Another concept that came into use simultaneously with the "international currency" is the "international unit of account". Its peculiarity lies in the fact that it is an artificial supranational financial system, a form of world money. Its purpose is to measure the requirements and obligations between states. The idea of introducing such a form of money appeared as early as 1944, and the first such form of money was to be the bancor. Its course was determined in relation to gold. However, this proposal was not implemented.

Today, this artificial form of money is the SDR. It acts as a settlement form of the International Monetary Fund. It is also used by various international monetary and financial organizations. The value of such a unit is directly affected by the exchange rate of world currencies.

Existing world currencies

The world currency - the US dollar - received the status of an international and reserve unit in the middle of the 20th century. This became possible thanks to the fixed exchange rate, which it differed at that time. This situation led to the recognition of the dollar as the global financial standard. This trend has continued to this day. An international currency transfer is easiest to perform in this currency, almost 60% of the total volume is carried out in this particular monetary system. The dollar is largely unaffected by economic downturns or financial instability. The exchange of state monetary units for dollars is possible in almost all corners of the world.

Since 1999, a new world unit, the euro, has appeared on the world stage. It replaced the previously existing settlement form of the European Union - ECU. In addition, the euro is the world's second most popular reserve standard. To his rapid growth as a global currency, the euro owes its debt to the German mark, from which it inherited a share in reserves and settlements. The euro exchange rate, like the dollar exchange rate, retains its stability, which other European money cannot boast of. A significant plus for the euro's entry into the world market was the fact that many EU countries not only began to use it, but also assigned it a state status.

International currency units, such as the pound sterling and the Japanese yen, are not so popular, acting as the main monetary standard for interstate settlements only in a certain region. The past centuries were marked by the greater importance of the yen, while the pound remained in the last position.

However, in recent times the situation has changed dramatically. The yen has practically lost its world status, and the pound sterling has begun to reach new levels.

The term "currency" is used in two senses: firstly, it is the monetary unit of the state; secondly, these are banknotes of foreign states, as well as credit and payment documents denominated in foreign monetary units and used in international settlements (foreign currency).

In finance and financial law, in official and everyday vocabulary, the term "currency" is most often used in the second meaning. In the sources of financial law, the above definition of currency is specified in relation to the objects covered by the concept of "currency".

To characterize the ratio of domestic and foreign currencies, the following concepts are used: "irreversible (non-convertible) currency", used within only one state for foreign currency and is, therefore, a means of payment, and for international market, "partially convertible (convertible) currency" is not used in all, external currency transactions and in the relations of not all subjects.

According to Art. 1 Law, currency Russian Federation- This:

a) in circulation, as well as withdrawn or withdrawn from circulation, but subject to exchange, rubles in the form of bank notes (banknotes) of the Central Bank of the Russian Federation and coins;

b) funds in rubles on accounts with banks and other credit institutions in the Russian Federation;

c) funds in rubles on accounts in banks and other credit institutions outside the Russian Federation on the basis of an agreement concluded between the Government of the Russian Federation and the Central Bank of the Russian Federation by the relevant authorities of a foreign state on the use on the territory of this state of the currency of the Russian Federation as legal tender " .

Analysis of the above definition allows us to note three main characteristics of the currency of the Russian Federation:

1. The national currency unit is the legally established monetary unit of the state - the ruble. Thus, according to its essential characteristic, the currency is money, with all the properties of the universal equivalent inherent in them. At the same time, currency and money are not identical concepts. The diverse formulations contained in the scientific literature indicate a specific feature of the currency as a form of money: its "displacement", focus on the world market, servicing international economic relations. "The currency becomes the money that is recognized by the world community as universal equivalents" It should be noted that the Russian ruble as the basis of the monetary system of the Russian Federation was legally put into circulation in 1993 and replaced the ruble former USSR. As a result, the monetary and currency systems of Russia became isolated from the monetary and currency systems of the former USSR.

2. According to the wording of the Law, it is not real money that acts as a currency, but its functional forms: banknotes, coins, account entries. Recall that the listed functional forms of money differ from real money(for example, gold and silver coins) by the fact that they do not have their own value, but serve only as a symbol, a sign of value. Real money - gold or silver coins - had the value of the corresponding precious metal of which they consisted.

3. Finally, the definition of the Law contains two different degrees of "materialization", "substantiality" of the currency: on the one hand, traditional banknotes and coins, on the other hand, account entries.

The law contains the wording of foreign currency, which means:

a) banknotes in the form of banknotes, treasury bills that are in circulation and are legal tender in the relevant foreign state or group of states, as well as banknotes withdrawn or withdrawn from circulation, but subject to exchange;

b) funds on accounts in monetary units of foreign states and international monetary or accounting units (Article 3).

The above three characteristics of the currency of the Russian Federation are also applicable to foreign currency. It should also be noted that an international unit of account is an artificial currency unit, which is a conditional scale used to measure international debt obligations, payments, etc. For example, since 1979 there has been a European currency unit - the ECU.

Term "currency" applied in three ways:

Currency is the currency of that particular country.
Currency These are foreign monetary funds and units of account.
Currency- these are international units of account such as "euro", SDR, etc.

Since the task is to promote development, any national currency must have external and internal convertibility, i.e., the possibility of converting into the currencies of other states. Convertibility determines the degree of currency liquidity in international financial markets. Thus, currency convertibility characterizes the quality of the currency. Depending on the degree of convertibility, three groups (classes) of currencies can be distinguished.

1. Freely convertible currency(SLE). Such a currency is freely and without restrictions exchanged for other foreign currencies, i.e. hard currency has full external and internal convertibility.

The scope of the exchange of hard currency extends both to current operations (transactions related to the implementation of the export-import of goods and services), and to operations related to the movement of capital, for example, obtaining external loans or foreign investment.

Thus, we can say that a freely convertible currency is the currency of the country in which there are no legal restrictions on any transactions with it.

Freely convertible currencies are the American dollar (USD), British pound sterling (GBF), Swiss franc (CHF), etc.

2. Partially convertible currency(PCI). Such currencies include the national currencies of those countries in which currency restrictions are applied to residents, as well as for certain types of exchange transactions. For example, the Russian ruble is partially convertible.

3. Non-convertible (closed) currency(NKV). This is a national currency that functions only within a given country and is not exchanged for foreign currencies.

The rank of the currency is determined by the International Monetary Fund.

In addition, international trade uses currency units that exist only in non-cash form - clearing currencies.

Clearing currencies- these are currency units of account that exist only in non-cash form and are used only by the countries participating in the payment agreement when making mutual settlements for goods and services supplied.

In the global economy, there is the concept of reserve currencies.

Reserve currency- These are the national credit and monetary resources of the leading countries participating in world trade, which are used for international settlements in foreign trade operations and in determining world prices.

Historically, the original role of the reserve currency was performed by the British pound sterling. This was natural, because industry and trade were actively developing in England. In addition, England had many colonial possessions, where the trade exchange was based on the pound sterling. However, later, due to the rapid development of the United States, their national currency (dollar) began to rapidly replace the pound sterling, acting as the main reserve currency. The role of the reserve currency (USD) was finally assigned to the US dollar in 1944 at the Bretton Woods Conference.

The US dollar is currently the world's main reserve currency. Most of the international settlements are carried out in this currency, world prices for many commodity groups are fixed. In addition, all world statistics are based on USD.

The exchange rate has a great influence on international economic relations. It should be noted that at present the monetary policy of the state can have a great influence on the exchange rate. In order to maintain the national currency, the central bank of any country can conduct foreign exchange interventions.

Currency interventions- this is the impact on the exchange rate of the national currency through the purchase or sale of a significant amount of foreign currency by government agencies. For example, the Central Bank of Russia (CBR), in order to strengthen the ruble, can sell part of its foreign exchange reserves on the foreign exchange market.

Exchange rate

Currency parity

Money fulfills the measures of value and means of circulation only within the limits of the corresponding state. Outside of these functions, purchasing power is determined by comparison with foreign currencies, and the external value of money is expressed in units of foreign currencies. When determining the external value of money, the following problems arise: the determination of the currency parity by state bodies; formation of rates in the foreign exchange markets.

Currency parity- this is a legally established ratio between two currencies, which is the basis of the exchange rate. In modern conditions, currency parity is established on the basis of special drawing rights (SDRs). The SDR is the international settlement currency used by IMF member countries.

- the ratio between the monetary units of various countries in terms of their purchasing power to a certain set of goods and services - certifies that on the world market the same product must have the same price in all countries if it is calculated in the same currency. But in the world market, goods are sold and bought for different money, so there must be a certain relationship between currencies. This ratio is expressed by the Kessel formula:

For example, 1 dollar = 1.5 euros, or 1 euro = 0.75 dollars, which means that you can buy the same amount of useful products for both 1 dollar and 1.5 euros.

Both parities are used in setting official exchange rates.

exchange rate is the ratio between two currencies or is the price of one currency expressed in terms of another currency.

The nominal exchange rate is the actual price of one currency in units of another currency. For example, the price of 1 US dollar on the Russian market in January 2002 was 30 rubles, and the price of 1 ruble was approximately 0.33 US dollars.

There are the following types of exchange rates:

fixed exchange rate- this is the official ratio between the two currencies, established by law;
floating- is set at the auctions on the currency exchange;
cross course- this is the ratio between two currencies, which follows from their exchange rate against a third currency;
current- this is the rate of cash, i.e. cash transaction. According to it, settlements are made within two days;
forward or the rate of a futures transaction is the rate for calculating a foreign exchange (forward) contract after a certain time after the conclusion of the contract.

The value of the currency is expressed in price, which is determined by the value of the currency in relative units of another currency - national or foreign. The price of a foreign currency is called exchange rate.

To designate currencies when concluding transactions, apply ISO- currency codes. An individual currency code consists of three letters: the first two letters indicate the country, the third - the currency. Examples of ISO codes for some currencies are presented in the table.

Exchange rates are displayed by the pair of currencies involved in the transaction, such as GBP/USD or USD/CHF, where GBP/USD indicates how many US dollars are in 1 British pound (how many US dollars can be bought for 1 British pound), and USD/CHF shows how many Swiss francs are in 1 US dollar (how many Swiss francs can be bought with 1 US dollar).

The currency that is bought or sold, i.e. traded, is called traded currency, and the currency that serves to evaluate the traded currency is quote currency. So, when displaying a currency pair, the first of the indicated currencies is the traded currency, and the second is the quote currency.

Usually, when denoting the exchange rate, the foreign currency acts as the traded currency, and the local currency as the quote currency. This quote is called straight, or appraisal: the price of a certain amount of foreign currency is expressed in variable national units. Such a quotation system is used, in particular, in Switzerland, Japan, Canada. For example, the quote USD/JPY106.4 shows that there are 106.4 Japanese yen in 1 US dollar.

Indirect (reverse) exchange rate quote is the price of a standard unit of local currency, expressed in variable units of foreign currency.

The system of indirect quotations of their currency, in particular, is used by Great Britain and Australia (GBP/USD and AUD/USD). An indirect quote is also used when calculating the euro exchange rate (EUR/USD).

For example, the quote EUR/USD1.23 shows that 1 euro contains 1.23 US dollars.

In interbank currency trading, the bank that quotes the currency usually quotes the bid and ask rates. The buying rate is designated as the Bid rate, the selling rate - Offer(Ask).

With a direct quote, the Bid rate is the rate at which banks buy the traded (foreign) currency and sell the national one. The Offer(Ask) rate is the rate at which the bank sells the traded currency and buys the national one. The amount by which the Bid rate differs from the Offer(Ask) rate is called spread.

The largest volume of transactions made in the foreign exchange market falls on spot transactions. Deals spot all foreign exchange transactions are called, payments for which are made on the second banking day after the conclusion of the transaction. If this day falls on a weekend, the due date (value date) is the next business day. The rate at which spot transactions are concluded is called spot rate.

An example of calculating the value date is shown in the table.

Cross course- this is the ratio between two currencies, which is calculated based on their exchange rate in relation to the rate of a third currency. As a rule, when calculating cross-rates, the US dollar is the third currency. This is due to the fact that the US dollar is not only the main reserve currency, but also the transaction currency in most foreign exchange transactions.

As an example of using cross rates, you can calculate the EUR/YPJ rate using the EUR/USD and USD/YPJ rates:

Currency quote

The process of setting the exchange rate is called currency quotation.

Quote types:

Depending on the location of the exchange, on the country where the currency transaction takes place, there are:

1. direct currency quote. With it, the cost of a unit of foreign currency is expressed through a certain amount of the national currency.

1 unit currencies = to units. national currency.
1 dollar = 31 rubles.

If the transaction is made in any country;

2. Indirect currency quote. With it, the cost of a unit (i.e., 1 piece) of a national currency is expressed in a certain amount of a foreign currency.

1 unit of national currency = X units of foreign currency.
1 ruble = 1/28 dollars.

The same quote, depending on the country where the transaction is made, can be direct and indirect.

The exchange rate is quoted in two directions:

buyer's rate- in accordance with this rate, the bank will buy foreign currency in exchange for national;
seller's rate- in accordance with this rate, the bank sells foreign currency in exchange for national.

With a direct quote, the seller's rate is usually higher than the buyer's rate.

With indirect quotation, the buyer's rate is higher than the seller's rate.

If the quotation of two currencies is carried out by calculating through a third currency, then such a quotation is called a cross rate.

Currency convertibility is the ability to exchange national currency for a foreign one. It happens:

full convertibility— exchange without restrictions (dollar);
incomplete convertibility— the exchange is limited (ruble).

There are no restrictions on the domestic market (purchase of foreign currency for rubles).

In relations outside the country, the Central Bank sets restrictions.

The Italian word "currency" came into Russian in the middle of the 18th century. At first it meant "payment on a bill", but already in the middle of the 19th century it acquired a new meaning - a state backed by gold. "In this article we will tell you what a currency is.

General information

Banknotes, coins, treasury notes, which are legal tender and form the basis of the state's monetary system, are called currency. In everyday vocabulary, this term is most often used as banknotes of a foreign state. To distinguish between these two concepts, the following notation is used:

a closed currency operates within one state;
convertible can be exchanged for the currency of another country.

Types of currencies

In each country there is a national and foreign Russia - rubles that are in circulation, withdrawn from circulation, funds on accounts in banks of the Russian Federation and abroad, which are recognized as a means of payment. The national currency is used for internal settlements, and foreign - for international. The second is money that is in free circulation or withdrawn from it, but is a means of payment in a foreign state or group of countries. To carry out international transactions, it is necessary to exchange currency based on the established exchange rate. This is the price of one currency, expressed in the monetary units of another state. The rate is set on the basis of supply and demand in the foreign exchange market. The goods on it are monetary units: rubles, dollars, yen, and so on. The exchange rates of national and foreign currencies change in different directions. The fall in the value of the domestic currency leads to cheaper exports and more expensive imports.

Course sustainability

According to the degree of stability, courses are divided into strong and weak. A hard currency is backed by a gold reserve and is stable against the value of other monetary units. For strong ones, the excess of the market price over the face value is characteristic. A weak currency is less stable against the exchange rates of other countries' currencies. Its market rate is below par. The same monetary unit in practice is strong and weak in relation to the currencies of different countries.

The official exchange rates of foreign currencies against the ruble are set by the Central Bank every working day. They come into force on the next working day after signing and are valid until the next order. These data are published on the website of the Bank of Russia. However, banks have no obligation to buy or sell currency at this rate. For legal and individuals such information is for informational purposes only. To find out the exact exchange rate, you will have to use a currency converter. It can be found on the website of any bank.

Characteristics of monetary units

The conditions and volumes of sales largely depend on the restrictions that are set by the state and are characterized by the convertibility parameter. This is a certain financial regime that allows, in the course of foreign economic operations, to exchange the national currency for a foreign one. According to this indicator, the currency in banks is divided into three groups.

Types of convertibility

Freely convertible currency (CVC) is freely exchanged for the monetary units of other countries, as well as for means of payment that are used for settlements in international transactions. In world practice, the main characteristics of turnover are:

the absence of any restrictions on the exchange;
having a flexible course.

ICS are used for transfers in the international payment system (CLS). This allows individuals and entrepreneurs to conduct transactions without exchanging the national currency for any convertible.

Having dealt with the issue of ICS, we turn to the question of what is a partially convertible and closed (non-convertible) currency.

The first is a currency with certain restrictions on turnover in a particular region, for certain persons or for several types of transactions. Non-convertible is a monetary unit, which, for economic or political reasons, the state has forbidden to exchange for banknotes of another country.

Within the framework of a partially convertible currency, external and internal turnover is distinguished. The first implies the possibility of foreign states to freely transfer their national currency abroad. Domestic implies the right of citizens and enterprises to buy foreign currency for transactions. To introduce convertibility, the state must adopt an appropriate law.

Benefits of ICS

Having dealt with the question of what is a currency that is freely convertible, we turn to the question of what advantages this gives the state. Today, free turnover is determined by the economic power of the country. ICS allows the state to create favorable conditions for improving the balance of payments, indicates economic freedom, contributes to the development of international competition, as a result of which enterprises are forced to increase production efficiency.

In such conditions, organizations can receive loans in banknotes of a foreign state. Foreign economic activity is being stimulated: by reducing the currency risk, exports and imports of goods increase. But at the same time, the rise in the price of imports leads to the devaluation of the national currency. The introduction of the ICS involves the state in the system of international division of labor, increases the inflow of foreign capital, and also simplifies the procedure for conducting transactions.

Conditions for the formation of turnover

These include:

satisfaction of demand with supply in the market;
availability of the required amount of liquid assets;
creation of a reserve fund;
a balanced balance of payments;
if any, should not exceed 5% of GDP;
conducting a reasonable pricing policy without distortions, but taking into account the laws of value;
pursuing a prudent credit policy with a rational interest rate and targeted financing;
introduction of effective antimonopoly laws in order to demonopolize the economy.

World currencies

Due to liquidity and influence on the financial market, seven monetary units are usually referred to as world currencies:

Euro;
U.S. dollar;
Canadian, Austrian and Swiss dollars;
Japanese yen;
Swiss frank.

A greater number of contracts are concluded in these currencies, they are most often traded on the Forex market.

The main features of world banknotes:

high liquidity;
solvency;
exchange rate stability.

They are used to create gold and foreign exchange reserves. The rates of world currencies are interconnected. When the price of one falls, the value of the other increases. And vice versa.

Most European countries have their own currencies and central banks that regulate monetary policy. In 1996, a monetary union was formed, which by 2014 already unites 18 countries. In the Eurozone, control is exercised by the European Central Bank. The currency in force in this territory is the euro. Since 1999, the euro has been used for non-cash payments. Since 2002 - for cash payments. Today, the euro competes with the dollar in terms of turnover and shares in the creation of gold and foreign exchange reserves.

Another very popular world currency is the US dollar. It is a means of payment in more than twenty countries of the world. For the last half century, the dollar has been one of the sources for creating a reserve currency. Immediately after the Second World War, he supplanted

The yen is used for transactions in Asian countries. There are more payments in national currency than in dollars or euros.

Approximately 5% of foreign exchange reserves are formed in pounds sterling. The UK national currency is one of the most stable in the world.

The Australian dollar is very popular on the Sydney Stock Exchange.

It is most often used for settlements on commodity exchanges when trading sand, metals and energy resources.

Russian currency - SVK

In order for the ruble to become fully convertible, it must be backed by a material equivalent. In theory, the Russian economy, assessed by independent experts on high level, could become such an equivalent. But in practice, a more realistic option is the provision of the ruble by the state. The launch of a convertible currency that is not backed by government obligations, as was the case with the dollar, will no longer work. The euro as a world currency still holds a conditionally state status.

Ensuring the status of the SVK by the state implies that Russia, upon first demand, will have to pay with material resources. That is, the ruble mass in the world should not exceed the material support of the country. Given the corruption at all levels of government, it is quite difficult to guarantee this.

However, the Russian government is taking every step to give the ruble the status of SVK. Recently, the Bank of Russia announced its intention to completely switch to the ruble. Other credit institutions, including Sberbank, also "thought" about this. The currency of the Russian Federation may soon be included in the list of Continuous Linked Settlement Bank. It uses ICS for calculations. The Bank of Russia has already filed a corresponding application with CLS, but there is no response yet.

Summary

Issued by one country, but used as a means of payment in other countries, indicate a high level of development of the state. Ideally, banknotes and coins should be supported by the legal status of the country or its national wealth, freely exchanged for banknotes of other countries. That's what a currency that is freely convertible all over the world is.

The history of the development of commodity-money relations begins at the origins of human society. Cash payment was the most ancient form of payment - visual, but not very convenient (for example, King Solomon paid one mare or two stallions for each trunk of the Lebanese cedar in the 11th century BC during the construction of the First Temple in Jerusalem). Cash was typical for local trade, but international trade was unthinkable without a non-cash form of payment.
The demand for non-cash payments in interethnic transactions generated in the XVI-XVII centuries. bill forms of international payments. An indispensable participant in non-cash payments between partners since the 18th century. banks have become. The advantages of cashless payments are quite obvious: the convenience of handling large amounts, the standardity of the transfer operation, ease of accounting and reporting, significant security, guarantee of the safety of funds and their control, attraction of loans and various forms of financing trade transactions.
For a long historical period, gold has been the instrument of international settlements. However, in practice, international settlements have always been carried out in the generally recognized strong and stable (hard) currency of the world, which is called the reserve currency. In the 19th century and before the First World War, international settlements were, as a rule, in British pounds sterling.
After the Second World War, the main reserve currency of the Western world was the US dollar, which currently serves about 45% of foreign trade. This was explained not only by the fact that it is inconvenient to pay with gold, since every time it was necessary to perform refining of gold: to cast a certain size gold bar of the appropriate weight and percentage of gold (a standard gold bar has a mass of 12,500 g, in the ligature the fineness is 0.9995), but also bear the cost of sending it from one country to another and insuring the transportation of the precious metal, which is, as a rule, 1% of the cost of supplying gold. The main reason is that the development of foreign trade turnover at all times significantly outstripped the world production of precious metals (in particular, gold). With the development of credit relations, credit money (bills, banknotes, checks) gradually replaced gold, first from domestic money circulation, and then from international monetary relations. In the 70s of the XX century there was an official demonetization of gold, i.e. gold gradually lost the direct function of world money.
In modern conditions, gold performs the functions of world money only partially and indirectly - through operations in the gold markets, where gold, as a highly liquid commodity, can be quickly sold and purchased the necessary currencies and, accordingly, goods, or gold can be used as collateral when obtaining foreign loans. At the same time, gold also acts at the present time as a necessary state insurance fund in the form of gold reserves of the central bank, as well as a means of hoarding (accumulation) for private individuals.
In addition to the US dollar and other freely convertible currencies, SDRs (SDRs) are currently used as world money ( special rights borrowings) and the euro - the monetary unit used by the countries of the European Monetary and Economic Union.
To ensure the functioning of the system of international settlements, it is necessary to carry out the following financial transactions within the framework of the global, regional and national currency systems:
currency conversion - the exchange of national currency for foreign;
transactions for the purchase and sale of currencies carried out in commercial banks or on stock exchanges, they are usually called currency dealing;
operations of commercial banks to attract and place foreign exchange funds, which are called deposit and credit. These are interbank operations for mutual lending, placement of borrowed or own funds, provision, execution and monitoring of loans;
banking services for foreign trade settlements in the forms accepted in international practice;
operations related to servicing credit (debit) card holders.
Financial business is a special form of entrepreneurship in which money (currency) and securities act as the subject of sale and purchase. Demand for monetary resources1 and capital V03Nikaet due to limited and insufficient financial resources. Money (currency) is sold by banks to entrepreneurs or provided to them on credit. The bank's profit arises as a result of the difference between the price of buying and selling currency or as a result of charging interest for the provision of monetary (currency) resources. Securities serve the long-term investment of the business and bring profit in the form of dividends on shares or interest on bonds. In addition, securities are bought or sold for the purpose of making speculative gains on foreign exchange differences that may result from changes in the buying and selling prices. valuable papers.
Like any type of business, financial business is associated with a certain risk that arises from the uncertainty of decisions due to the incompleteness and insufficiency of information about the state (conjuncture) of financial markets (on the presence and magnitude of demand and supply for capital and financial resources, on financial stability and solvency customers, about tariffs and dividends, about the position and actions of possible competitors, etc.), as a result of the imbalance of the main components in the world financial and credit relations.
To minimize financial risks, an insurance business arises, one of the segments of which is hedging. Hedging refers to compensatory actions taken by a buyer or seller in the foreign exchange or stock market in order to protect their income in the future from changes in the exchange rate or prices of stock instruments. The presence of hedging, in turn, gives rise to special markets for secondary financial instruments - derivatives. Thus, the technology of international financial business consists in choosing one or another investment strategy Money into various financial instruments (major world currencies and securities) in order to make a profit.
It is assumed that the process of managing invested capital unfolds over time as a dynamic sequence of investment decisions. If the goal of investment activity is to maximize profit on invested funds, subject to limiting the risk of investment, then the desired investment (speculative) strategy, which provides an extreme value for the selected criterion, will simultaneously be the optimal strategy.
The participants of the international financial business are:
states and central banks;
national and transnational banks, large commercial banks, through which the bulk of all international settlements and securities trading is carried out;
national companies, primarily TNCs;
pension, investment mutual and hedge funds; - Insurance companies;
population and private investors;
electronic network markets and currency exchanges.
When did the international financial business really emerge? The time of its occurrence can be associated with the development of international monetary,
credit and stock markets. Indeed, currency bills appeared at the first bill fairs back in the Middle Ages, apparently in the city-states of Italy. However, we can talk about developed financial markets in the modern sense when joint-stock companies, currency and stock exchanges arise. This happened at the beginning of the 17th century. The Dutch Stock Exchange is, in fact, the first stock market. Further strengthening of the international financial business was facilitated by:
development of international economic relations; - internationalization of economic relations;
strengthening the world monetary system;
increased concentration and centralization of banking capital. The international financial business is developing especially rapidly in the second half of the 20th century. and at the beginning of the XXI century. for several reasons. First, the global financial environment has changed rapidly over the past decades due to the globalization of the world economy. These changes were expressed in the collapse of the communist system in Russia and the countries of Eastern Europe and their transition to a market economy, which contributed to the growth of the Eurocurrency market, the development of the common European market, the strengthening of the role of TNCs, and the strengthening of the movement of international capital. The development of international financial business was facilitated by the process of rapid development of the financial sector in the economy, which is:
an increase in the share of the financial sector of the economy in the GDP of industrialized countries;
growth in the share of financial services in the total volume of services (in developed countries, financial services account for more than 50% of all services);
advancing development of financial markets in relation to commodity markets. For every dollar traded in commodity markets, there is more than $60. in financial markets;
growth in the share of financial assets in the balance sheets of enterprises;
increase in the share of financial instruments in the property savings of the population while reducing the share of bank deposits in real assets. For example, 45% of Americans are stockholders, and fluctuations in stock prices largely determine their personal wealth.
The field of activity of the international financial business is the financial markets. Development computer networks contributed to the globalization of financial markets and leading international monetary centers. Closer interconnections between international centers have produced a financial revolution, the essence of which is the increase in the number and role of financial institutions, financial integration and the rapid development of new financial methods and banking technologies.
Along with the positive changes in the global financial environment, a number of negative aspects should also be noted: international financial crises have become more frequent, and the international debt crisis is deepening.

Financial market - this is the sphere of business relations where demand and supply for financial resources are formed, the movement of these resources is carried out to ensure the fullness of the performance of any business operations.

As we know from the first section of the Basics of Business textbook, money became an attribute of the economy at a certain historical stage in the development of the latter, as a result of the consistent transformation of barter exchange relations into commodity-money ones. We also defined money as a special commodity-equivalent, the appearance of which was intended to systematize the exchange processes in the economy. Money supply, coins, banknotes and securities made up the totality financial resources market, which were designed to ensure constant equivalence in barter transactions in different parts of the market.

Each business entity understands the importance of financial resources, primarily money, in their lives. Money is a subtle and sensitive measure of any form of business activity, which gives a qualitative description and a quantitative assessment of any area of business activity. How much money is invested in the business? How much money is received after the sale of manufactured products? Where is the best place to invest money? Comparison makes it possible to judge the degree of profitability of the business, how and to what extent the business entity has managed to realize its interests.

Only with the help of money is a full-fledged business interaction of separate business entities carried out, and the market has a regulatory effect on any

an entrepreneurial firm engaged in any type of activity. If this firm produces goods or provides services acceptable to other business entities, it is money that signals entrepreneurial success. If the firm is not able to sell goods and services at prices that bring cash income, it incurs obvious losses, and its activities in the market are terminated.

The emergence of money one side , made it possible to overcome the limitations of the markets for the exchange of goods and services and contributed to the transformation of commodity exchange operations, the need for which follows from the processes of division of labor, first into a mass phenomenon, and then into a general one. However, on the other side , the appearance on the market of a certain universal commodity equivalent in the form of money, and later the use of paper and other banknotes as money, the emergence of securities, led to the emergence of a fundamentally new type of entrepreneurial activity, namely, activities to organize the circulation of money and to provide money circulation related services.

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