Convertibility is the quality that allowed money or other financial instruments to be converted into other liquid stores of value. Convertibility is an important factor in international trade, where instruments valued in different currencies must be exchanged.
Freely convertible currencies name immediate service on a ]
Some countries pass laws restricting a legal exchange rates of their currencies or requiring lets to exchange more than aamount. Some currencies, such(a) as the North Korean won, the Transnistrian ruble, as well as the Cuban national peso, are officially nonconvertible together with can only be exchanged on the black market. whether an official exchange rate is set, its benefit on the black market is often lower.
Convertibility command may be presents as part of an overall monetary policy. For example, restrictions on the Argentine peso were delivered during an economic crisis in the 1990s and scrapped in 2002 during a subsequent crisis.