INTERNATIONAL

FINANCE
ASSIGNMENT
ON
CURRENCIES
Submitted
to
Mr. Rishi Mehra

Prepared by
Abhijeet Singh Kadian
Roll No. 66
III-Semester
Global Business Operations-SRCC
THE CURRENCIES CHOSEN WERE: BRITAIN POUND, UNITED STATES
DOLLAR , CHINESE YUAN, UAE DIRHAM, UNITED STATES MINOR
OUTLYING ISLANDS DOLLARS , URUGUAY PESO .
.VARIOUS ASPECTS LIKE THEIR ORIGIN , HISTORY, CIRCULATION AND
EXCHANGE RATES HAVE BEEN COVERED.
 BRITAIN (UNITED KINGDOM), POUNDS
The history of the Pound Sterling

The pound sterling of the United Kingdom was originally the value of one Troy pound of
sterling silver, hence the name: Pound Sterling.

The Pound Sterling was adopted as the Royal Chartered Bank of England's currency in
1694. England's national debt increased exponentially from 1700 to the mid 1790's thus
making it extremely difficult to exchange banknotes for gold. The subsequent strain on
the nation's financial system led to what was known as the Restriction Period when in
order for the bank to play catch up with its' finances, it issued banknotes of one and two
pounds in place of the actual coinage.

In further efforts to increase the stability of the pound, the Bank Charter Act of 1844
introduced the Bank of England as the only bank in the United Kingdom allowed to issue
banknotes as a legal currency. This meant that all other banks in England and Wales were
legally obliged to obtain their banknotes from the Bank of England. In Scotland,
however, The Banknote (Scotland) Act of 1845 allowed Scottish banks to continue to
issue their own Pound Sterling banknotes.

Having learned from the effects that inflation had on the financial market from the
Restriction Period the Bank of England began to control the production of banknotes.
This ensured that banknotes were only produced when there were gold reserves to back
them. The Bank of England became a major lender to other commercial banks. As it was
difficult to keep backing banknotes with gold standard while still lending to other banks
the Bank of England had to set interest rates high to maintain the gold standard supply.

Shortly before the First World War, the treasury issued the small and simple cipher
watermarked stamp paper 10/- and £1 banknotes. The Bank of England tried to return to
gold standard after the war, but gold standard could no longer continue to work in the
growing financial market. From 1932 to the present day, the only limitation on issuing
bank notes is that of the UK Parliament's approval.

One pound is divided into 100 pence, the singular of which is "penny".
The symbol for the penny is "p"; hence an amount such as 50p (£0.50)
is usually pronounced "fifty pee" rather than "fifty pence".

Prior to decimalisation in 1971, each pound was divided into twenty

shillings, with a shilling equal to 12 pence. The symbol for the shilling
was "s" — not from the first letter of the word, but rather from the
Latin word solidus. The symbol for the penny was "d", from the French
word denier (sum of money), which in turn was from the Latin word
denarius.
After Decimal Day, the value of one penny was therefore different from
its pre-decimalisation value. For the first few years after 71, the new
type of penny was commonly referred to as a new penny. Coins for
denominations of ½p, 1p, 2p, 5p, 10p and 50p all bore the name New
Pence. The half pence was dropped in1984. The British decimal Twenty
Pence (20p) coin was issued in June 1982 to fill in the obvious gap
between the Ten Pence and Fifty Pence coins; it rapidly gained
acceptance. The one pound coin was introduced in 1983 to replace the
Bank of England One Pound note. The two pound coin was introduced
in 1998 (dated 1997). Although it has been issued from 86 - 96 as a
commemorative coin. Twenty-Five Pence and Five Pounds have been
issued as commemorative coins.

The £ & Rarely the L is used. Both symbols derive from libra, the Latin
word for "pound".

Pound sterling was used as the currency of the British Empire. As this
became the Commonwealth of Nations, dominions introduced their
own currencies (such as the Australian pound and Irish pound) — first
pegged to sterling, and later breaking parity (Australia in 1931 and
Ireland in 1979).

Banknotes issues in UK £5, £10, £20, £50

Forex History issues:

Sterling unofficially moved to the gold standard from silver thanks to

an overvaluation of gold in England that drew gold from abroad and
occasioned a steady export of silver coin, in spite of a re-evaluation of
gold in 1717 by Sir Isaac Newton, Master of the Royal Mint.

In common with all other world currencies, there is no longer any link
to precious metals. The U.S. dollar was the last to leave gold, in 1971.
The pound was made fully convertible in 1946 as a condition for
receiving a U.S. loan of US$3.75 billion in the aftermath of World War
II.

Since leaving gold, there have been several attempts to peg the value
of the pound to other currencies, initially the U.S. dollar.

Under continuing economic pressure, and despite months of denials

that it would do so, on September 19, 1949, the government devalued
the pound by 30%, from US$4.03 to US$2.80. pound was eventually
devalued by 14.3% to US$2.41 in November 1967.
With the break down of the Bretton Woods system — not least because
British currency dealers created a substantial Eurodollar market — the
pound was floated in the early 1970s and so subject to a market
valuation.

From 23 June 1972 the Chancellor Mr Barber floated the £ and told MPs
the trade balance had deteriorated in the past couple of months and it
had become necessary to shore up sterling by using the Bank of
England's reserves. The Chancellor went to Luxembourg on 26 June to
explain his decision to float the pound to the finance ministers of the
six Common Market countries.
He assured them the pound would return to operating within fixed
trading bands in time for Britain to join its European partners in 1973.

In 1998 the conservative government decided to shadow the West

German currency. In 1990 the government joined the ERM (European
Exchange Rate) Mechanism , with the pound set at DM 2.95. However,
the country was forced to withdraw from the system on Black
Wednesday (September 16, 1992) as the exchange rate became
unsustainable. Speculator George Soros made US$1 billion from
shorting the pound. Ultimately proponents of a lower GBP/DM
exchange rate were vindicated as the cheaper pound encouraged
exports and contributed to the economic prosperity of the 1990s. In
the mid to late nineties the £ rose in value and many claimed the
decline in the British export industry was due to the high exchange
rate difference with the Euro and the pound.

Gibraltar and the islands of Guernsey, Jersey, Saint Helena, the

Falkland Islands and the Isle of Man, which are not part of the UK, also
issue their own currencies, which are fixed to the value of sterling.

Bank of England - (Should be Bank of Britain): known as "The Old Lady

of Threadneedle Street" The Bank of England is the central bank of the
United Kingdom. Sometimes known as the 'Old Lady' of Threadneedle
Street, the Bank was founded in 1694, nationalised on 1 March 1946,
and gained independence in 1997. Standing at the centre of the UK's
financial system, the Bank is committed to promoting and maintaining
monetary and financial stability as its contribution to a healthy
economy.

On behalf of HM Treasury, the Bank of England manages the Exchange

Equalisation Account, which holds the UK’s gold and foreign exchange
reserves. As part of this role, it manages the issuance of foreign
currency debt and has also recently carried out a series of gold
auctions. Subject to policy objectives, these reserves may be used to
attempt to influence the exchange rate.

One of the Bank of England's two core purposes is monetary stability.

Monetary stability means stable prices - low inflation - and confidence
in the currency. Stable prices are defined by the Government's
inflation target, which the Bank seeks to meet through the decisions on
interest rates taken by the Monetary Policy Committee. The Monetary
Policy Committee sets the Bank of England's official rate, the main
instrument of monetary policy. The Bank implements this rate through
its framework for operations in the sterling money markets.

The Bank deals in the foreign exchange market as part of its day-to-
day management of the "Exchange Equalisation Account" - which holds
the UK's foreign currency and gold reserves. These may be used,
subject to policy objectives, to attempt to influence the exchange rate
in case of need. The Bank also operates in the foreign exchange
market on its own behalf, and acting on behalf of customers.

The Bank of England has been issuing banknotes for over 300 years.
During that time, both the notes themselves and their role in society
have undergone continual change. From today’s perspective, it is easy
to accept that a piece of paper that costs a few pence to produce is
worth five, ten, twenty or fifty pounds. Gaining and maintaining public
confidence in the currency or, to put it another way, preserving its
value and integrity, is a key role of the Bank of England and one which
is essential to the proper functioning of the economy. Other banks in
the UK that issue banknotes include the Royal Bank of Scotland, the
Bank of Scotland, Clydesdale, the Bank of Ireland, First Trust, Northern
Bank and Ulster Bank.

Participating Members
The pound sterling is only used in the United Kingdom of Great Britain
and Northern Ireland and the following British dependencies outside
the UK: The Isle of Man, the States of Jersey and the States of
Guernsey. The Bank of England prints and distributes money for
England and Wales. The Bank of Ireland, the First Trust Bank, the
Northern Bank, and the Ulster Bank print the notes for Northern
Ireland. The Bank of Scotland, the Royal Bank of Scotland, and the
Clydesdale Bank print and distribute the notes for Scotland.
Since Pound Sterling bank notes are printed in different parts of the
UK, the design differs depending on where they are printed. Regardless
of the region where the notes are printed, they should be accepted
anywhere in the United Kingdom as legal tender. However, some
people often do not recognise a 'different' looking note from elsewhere
in the UK and subsequently consider it to be a foreign currency.

Denominations:
Coins:
1 penny or 1/100 pound
2 pence or 1/50 pound
5 pence or 1/20 pound
10 pence or 1/10 pound
20 pence or 1/5 pound
50 pence or 1/2 pound
1 pound
2 pounds

Banknotes:
5 pounds
10 pounds
20 pounds
50 pounds

SPECIMENS:
CIRCULATION:
All UK coins are produced by the Royal Mint. The same coinage is used
across all countries of the United Kingdom (England, Scotland, Wales
and Northern Ireland). Unlike banknotes, local issues of coins are not
produced in these regions. The pound coin until 2008 has been
produced in regional designs, but these circulate equally in all parts of
the UK (see UK designs, below).

Every year, newly minted coins are checked for size, weight, and
composition at a Trial of the Pyx. Essentially the same procedure has
been used since the 13th century. Assaying is now done by the
Worshipful Company of Goldsmiths on behalf of HM Treasury.
As of March 2007, the total value of coinage in circulation is estimated
at three and a half billion pounds, of which the £1 and £2 coins
account for over two billion pounds. The 1p and 2p coins from 1971 are
the oldest standard-issue coins still in circulation.

Coins from the British dependencies and territories that use the pound
as their currency are sometimes found in change in other jurisdictions.
Strictly they are not legal tender in the United Kingdom and tend not to
be accepted by UK traders and some banks. However, since they have
the same specifications as UK coins, they are sometimes tolerated in
commerce, and can readily be used in vending machines.

UK-issued coins are, on the other hand, generally fully accepted and
freely mixed in other British dependencies and territories that use the
pound.

An extensive coinage redesign was commissioned by the Royal Mint in

2005, and new designs were gradually introduced into the circulating
British coinage from summer 2008. The pre-2008 coins will remain
legal tender and are expected to stay in circulation for the foreseeable
future

EXCHANGE RATE:
1 pounds = 71.9172 INR

1 INR = 0.0139049 pounds

1 pound = 1.61173 $

1 USD = 0.620451 pounds

 CHINESE YUAN
Literally translated as "the people's currency" the renminbi (RMB) has been the currency
of China for over 50 years. It is also known as the Chinese yuan (CNY) and by the
symbol '¥'.

For many years, the renminbi was pegged to the U.S. dollar. In 2005, it was officially
unpegged and as of April 2009, had an exchange rate of 6.8 RMB to $1 U.S. dollar.

RENMINBI'S BEGINNINGS:

The renminbi was first issued on December 1, 1948 by the Chinese Communist Party's
People's Bank of China.

At that time, the CCP was deep into the civil war with the Chinese Nationalist Party,
which had its own curency, and the first issuance of the renminbi was used to stabilize
Communist held areas which assisted in a CCP victory.

After the defeat of the Nationalists in 1949, China's new government addressed the
extreme inflation that plagued the old regime by streamlining its financial system and
centralizing foreign exchange management.

SECOND ISSUE:

In 1955, the People's Bank of China, now China's central bank, issued it's second series
of the renminbi that replaced the first at a rate of one new RMB to 10,000 old RMB,
which has remained unchanged since.

A third series of RMB was issued in 1962 which used multi-color printing technology
and used hand-engraved printing plates for the first time.

In this period, the RMB's exchange value was unrealistically set with many western
currencies which created a large underground market for foreign exchange transactions.
With China's economic reforms in the 1980s, the RMB was devalued and became more
easily traded, creating a more realistic exchange rate. In 1987, a fourth series of RMB
was issued featuring a watermark, magnetic ink and fluorescent ink.

In 1999, a fifth series of RMB was issued, featuring Mao Zedong on all notes.

COINS

In 1955, aluminium 1, 2 and 5 fen coins were introduced. In 1980,

brass 1, 2, and 5 jiao and cupro-nickel 1 yuan coins were added,
although the 1 and 2 jiao were only produced until 1981, with the last
5 jiao and 1 yuan issued in 1985. In 1991, a new coinage was
introduced, consisting of an aluminium 1 jiao, brass 5 jiao and nickel-
clad-steel 1 yuan. Issuance of the 1 and 2 fen coins ceased in 1991,
with that of the 5 fen halting a year later. The small coins were still
made for annual mint sets, and from the beginning of 2005 again for
general circulation. New designs of the 1 and 5 jiao and 1 yuan were
introduced in between 1999 and 2002.

The use of coins varies from place to place. For example, coins are
more often used for values less or equal to 1 yuan in Shanghai and
Shenzhen but banknotes of the lower value are more often used than
coins in Beijing and Xi'an. Coins are used far less than banknotes in
China nowadays. Use of coins in self-service ticket vending machines
at metro stations may have contributed to the relatively frequent use
of coins in Shanghai.

INTERNATIONAL USE

The People's Republic of China has made tentative steps toward establishment of the
renminbi as an international currency using Hong Kong as a launching pad where
currency restrictions regarding renminbi denominated bank deposits and financial
products were greatly liberalized in July, 2010. In 2010 renminbi denominated bonds
were reported to have been purchased by Malaysia's central bank and that mcdonald's had
issued renmimbi denominated corporate bonds through Standard Chartered Bank of Hong
Kong.[13]

USE AS A CURRENCY OUTSIDE CHINA

The two special administrative regions, Hong Kong and Macau, have their own
respective currencies. According to the "one country, two systems" principle and the
basic laws of the two territories, national laws generally do not apply. Therefore, the
Hong Kong dollar and the Macanese pataca remain the legal tenders in the two territories,
and renminbi, although sometimes accepted, is not legal tender. Banks in Hong Kong
allow people to maintain accounts in RMB.

The RMB had a presence in Macau even before the 1999 return to the People's Republic
of China from Portugal. Banks in Macau can issue credit cards based on the renminbi but
not loans. Renminbi based credit cards cannot be used in Macau's casinos.

The current Republic of China government in Taiwan believes wide usage of the
renminbi would create an underground economy and undermine its sovereignty.[18]
Tourists are allowed to bring in up to 20,000 renminbi when visiting Taiwan. These
renminbi must be converted to the New Taiwan dollar at trial exchange sites in Matsu
and Kinmen. The Chen Shui-bian administration insisted that it would not allow full
convertibility until the mainland signs a bilateral foreign exchange settlement agreement,
though president Ma Ying-jeou has pledged to allow full convertibility as soon as
possible.

The renminbi is circulated in some of China's neighbors, such as Pakistan, Mongolia and
northern part of Thailand. Cambodia welcomes the renminbi as an official currency and
Laos and Myanmar allow it in border provinces. Though unofficial , Vietnam recognizes
the exchange of the renminbi to the đồng.

VALUE

For most of its early history, the RMB was pegged to the U.S. dollar at 2.46 yuan per
USD (note: during the 1970s, it was appreciated until it reached 1.50 yuan per USD in
1980). When China's economy gradually opened in the 1980s, the RMB was devalued in
order to improve the competitiveness of Chinese exports. Thus, the official RMB/USD
exchange rate declined from 1.50 yuan in 1980 to 8.62 yuan by 1994 (lowest ever on the
record). Improving current account balance during the latter half of the 1990s enabled the
Chinese government to maintain a peg of 8.27 yuan per USD from 1997 to 2005.

As of August 2, 2010, the yuan is valued at 14.7 US cents (or 6.796 per US dollar),[23]
which is €0.112 (or 8.89794 per euro).

DEPEGGED FROM THE U.S. DOLLAR

On July 21, 2005, the peg was finally lifted, which saw an immediate one-off RMB
revaluation to 8.11 per USD. The exchange rate against the euro stood at 10.07060 yuan
per euro.

However the peg was reinstituted unofficially when the financial crisis hit: "Under
intense pressure from Washington, China took small steps to allow its currency to
strengthen for three years starting in July 2005. But China "re-pegged" its currency to the
dollar as the financial crisis intensified in July 2008."

On June 19, 2010, the People’s Bank of China released a statement simultaneously in
Chinese and English indicating that they would "proceed further with reform of the RMB
exchange rate regime and increase the RMB exchange rate flexibility." The news was
greeted with praise by world leaders including Barack Obama , Nicolas Sarkozy and
Stephen Harper. The pboc maintained there would be no "large swings" in the currency.
The RMB rose to its highest level in five years and markets worldwide surged on
Monday, June 21 following China's announcement.

However China has simply shifted their reserves from dollar accounts to accounts in their
competitor nations, leading these other nations to invest in dollars to keep their own
currencies down. The result has been an international currency war.

MANAGED FLOAT

The RMB is now moved to a managed floating exchange rate based on market supply
and demand with reference to a basket of foreign currencies. The daily trading price of
the U.S. dollar against the RMB in the inter-bank foreign exchange market would be
allowed to float within a narrow band of 0.3% around the central parity published by the
People's Bank of China (PBC); in a later announcement published on May 18, 2007, the
band was extended to 0.5%.The PRC has stated that the basket is dominated by the
United States dollar, Euro, Japanese yen and South Korean won, with a smaller
proportion made up of the British pound, Thai baht, Russian ruble, Australian dollar,
Canadian dollar and Singapore dollar.

On April 10, 2008, it traded at 6.9920 yuan per US dollar, which is the first time in more
than a decade that a dollar bought less than seven yuan,. And at 11.03630 yuan per euro.

Beginning in January 2010, Chinese and non-Chinese citizens have an annual quota to
change a maximum of 50,000 USD. Exchange will only proceed if the applicant appears
in person at the relevant bank and presents his passport or his Chinese ID; these deals are
being centrally registered. The maximum withdrawal is 10,000 USD per day, the
maximum purchase quota of USD is 500 per day. This stringent management of the
currency leads to a bottled-up demand for exchange in both directions. It is viewed as a
major tool to keep the currency peg, preventing inflows of 'hot money’

A shift of Chinese reserves into the currencies of their other trading partners has caused
these nations to shift more of their reserves into dollars, leading to no great change in the
value of the Renminbi against the dollar.[34]

FUTURES MARKET

Renminbi futures are traded at the Chicago Mercantile Exchange. The futures are cash-
settled at the exchange rate published by the People's Bank of China.
PURCHASING POWER PARITY

Scholarly studies suggest that the yuan is undervalued on the basis of purchasing power
parity analysis.

• The World Bank estimated that, by purchasing power parity, one International
dollar was equivalent to approximately RMB1.9 in 2004.[36]
• The International Monetary Fund estimated that, by purchasing power parity, one
United States dollar was equivalent to approximately RMB3.462 in 2006,
RMB3.621 in 2007, and RMB3.798 in 2008.[37]
 UNITED STATES DOLLAR

The United States dollar (sign: $; code: USD) is the official currency of the United
States of America. The U.S. dollar is normally

The United States dollar (sign: $; code: USD) is the official currency of the United
States of America. The U.S. dollar is normally abbreviated as the dollar sign, $, or
as USD or US$ to distinguish it from other dollar-denominated currencies and from
others that use the $ symbol. It is divided into 100 cents.

The U.S. dollar is the currency most used in international transactions and is one of the
world's reserve currencies.[13] Several countriesuse it as their official currency, in many
others it is the de facto currency,[14] and it is also used as the sole currency in some British
Overseas Territories.

HISTORY

The first dollar coins issued by the United States Mint (founded 1792) were similar in
size and composition to the Spanish dollar. The Spanish, U.S. silver dollars, and Mexican
silver pesos circulated side by side in the United States, and the Spanish dollar and
Mexican peso remained legal tender until 1857. The coinage of various English colonies
also circulated. The lion dollar was popular in the Dutch New Netherland Colony (New
York), but the lion dollar also circulated throughout the English colonies during the 17th
century and early 18th century. Examples circulating in the colonies were usually worn
so that the design was not fully distinguishable, thus they were sometimes referred to as
"dog dollars".[28]

The U.S. dollar was created and defined by the Coinage Act of 1792. It specified a
"dollar" to be based in the Mexican peso at 1 dollar per peso and between 371 and
416 grains (27.0 g) of silver (depending on purity) and an 'eagle" to be between 247 and
270 grains (17 g) of gold (again depending on purity). The choice of the value, 371 grains
arose from Alexander Hamilton's decision to base the new American unit on the average
weight of a selection of worn Spanish dollars (and later Mexican peso). Hamilton got the
treasury to weigh a sample of Spanish dollars and the average weight came out to be 371
grains. A new Spanish dollar was usually about 377 grains in weight, and so the new U.S.
dollar was at a slight discount in relation to the Spanish dollar. The gold equivalent of the
Spanish dollar in sterling was ₤1 = $4.80, whereas the gold equivalent of the U.S. dollar
was ₤1 = 4.86⅔. This exchange rate with sterling remained right up until Britain
abandoned the gold standard in 1931.

The Coinage Act of 1792 set the value of an eagle at 10 dollars, and the dollar at 1/10th
eagle. It called for 90% silver alloy coins in denominations of 1, 1/2, 1/4, 1/10, and 1/20
dollars; it called for 90% gold alloy coins in denominations of 1, 1/2, 1/4, and 1/10
eagles.

The value of gold or silver contained in the dollar was then converted into relative value
in the economy for the buying and selling of goods. This allowed the value of things to
remain fairly constant over time, except for the influx and outflux of gold and silver in
the nation's economy.
DOLLAR SIGN

The symbol $, usually written before the numerical amount, is used for the U.S. dollar (as
well as for many other currencies). The sign's ultimate origins are not certain, though it is
possible that it comes from the Pillars of Hercules which flank the Spanish Coat of
arms on the Spanish dollars that were minted in the New World mints in Mexico
City, Potosí, Bolivia, and in Lima, Peru. These Pillars of Hercules on the silver Spanish
dollar coins take the form of two vertical bars and a swinging cloth band in the shape of
an "S".

Another explanation is that this symbol for peso was the result of a late 18th-century
evolution of the scribal abbreviation "ps." The p and the s eventually came to be written
over each other giving rise to $.

COINS

Official United States coins have been produced every year from 1792 to the present.
  Half-cent 1792 - 1857
 Penny 1793–present
 2-cent 1864–1873
 3-cent 1851-1873
 Half Dime 1792-1873 (Not to be confused with the Nickel below also worth 5
cents)
 Nickel 1866–present
 Dime 1792–present
 20-cent 1875-1878
 Quarter 1796–present
 Half dollar 1794–present
 Dollar coin (United States) 1794–present
 Quarter Eagle ($2.5 gold coin) 1792-1929
 Three-dollar piece 1854-1889
 Half Eagle ($5 gold coin) 1795-1929
 Eagle ($10 gold coin) 1795-1929
 Double Eagle ($20 gold coin) 1850-1933

COLLECTOR COINS

The United States Mint produces Proof Sets specifically for collectors and
speculators. Silver Proofs tend to be the standard designs but with the dime, quarter, half
dollar, and in some cases the dollar having silver content. Another type of proof set is the
Presidential Dollar Proof Set where four special $1 coins are minted each featuring a
president.

 2007 had George Washington, John Adams, Thomas Jefferson,

and James Madison
 2008 had James Monroe, John Quincy Adams, Andrew Jackson,
and Martin Van Buren
 2009 had William Henry Harrison, John Tyler, James K. Polk, and
Zachary Taylor
  2010 has Millard Fillmore, Franklin Pierce, James Buchanan, and
Abraham Lincoln
 2011 is to have Andrew Johnson, Ulysses S. Grant, Rutherford B.
Hayes, and James A. Garfield

VALUE
The 5th paragraph of Section 8 of Article 1 of the U.S. Constitution provides that the U.S.
Congress shall have the power to "coin money" and to "regulate the value" of domestic
and foreign coins. Congress exercised those powers when it enacted the Coinage Act of
1792. That Act provided for the minting of the first U.S. dollar and it declared that the
U.S. dollar shall have "the value of a Spanish milled dollar as the same is now current".

The table to the right shows the equivalent amount of goods that, in a particular year,
could be purchased with $1. The table shows that from 1774 through 2009 the U.S. dollar
has lost about 96.4% of its buying power.[43]

Buying power of one U.S. dollar compared to 1774 USD

Equivalent Equivalent Equivalent

Year Year Year
buying power buying power buying power

1774 $1.00 1860 $0.97 1950 $0.33

1780 $0.59 1870 $0.62 1960 $0.26

1790 $0.89 1880 $0.79 1970 $0.20

1800 $0.64 1890 $0.89 1980 $0.10

1810 $0.66 1900 $0.96 1990 $0.06

1820 $0.69 1910 $0.85 2000 $0.05

1830 $0.88 1920 $0.39 2007 $0.04

1840 $0.94 1930 $0.47 2008 $0.04

1850 $1.03 1940 $0.56 2009 $0.04

INTERNATIONAL USE
 Worldwide use of the U.S. dollar and the euro: United States External adopters of
the US dollar Currencies pegged to the US dollar Currencies pegged to the US dollar
w/ narrow band Euro zone External adopters of the euro Currencies pegged to the
euro Currencies pegged to the euro w/ narrow band Note that the Belarusian ruble is
pegged to the Euro, Russian Ruble, and U.S. Dollar in a currency basket.
The dollar is also used as the standard unit of currency in international markets for
commodities such as gold and petroleum (the latter sometimes called petrocurrency is the
source of the term petrodollar). Some non-U.S. companies dealing in globalized markets,
such as Airbus, list their prices in dollars.

The U.S. dollar is the world's foremost reserve currency. In addition to holdings by
central banks and other institutions, there are many private holdings, which are believed
to be mostly in one-hundred-dollar banknotes (indeed, most American banknotes actually
are held outside the United States). All holdings of U.S.-dollar bank deposits held by
non-residents of the United States are known as "eurodollars" (not to be confused with
the euro), regardless of the location of the bank holding the deposit (which may be inside
or outside the U.S.).

CURRENCY COMPOSITION OF OFFICIAL EXCHANGE

RESERVES

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07
62.1% 65.2% 69.3% 70.9% 70.5% 70.7% 66.5% 65.8% 65.9% 66.4% 65.7% 64.1%
17.9% 18.8% 19.8% 24.2% 25.3% 24.9% 24.3% 25.2% 26.3%
2.7% 2.6% 2.7% 2.9% 2.8% 2.7% 2.9% 2.6% 3.3% 3.6% 4.2% 4.7%
6.7% 5.8% 6.2% 6.4% 6.3% 5.2% 4.5% 4.1% 3.9% 3.7% 3.2% 2.9%
14.7% 14.5% 13.8%
1.8% 1.4% 1.6%
0.2% 0.4% 0.3% 0.2% 0.3% 0.3% 0.4% 0.2% 0.2% 0.1% 0.2% 0.2%
11.7% 10.2% 6.1% 1.6% 1.4% 1.2% 1.4% 1.9% 1.8% 1.9% 1.5% 1.8%

DOLLAR VS EURO

Euro per U.S. dollar 1999–2010

Highest ↑ Lowest ↓
Year
Date Rate Date Rate

1999 03 Dec €0.9985 05 Jan €0.8482

2000 26 Oct €1.2118 06 Jan €0.9626

2001 06 Jul €1.1927 05 Jan €1.0477

2002 28 Jan €1.1658 31 Dec €0.9536

2003 08 Jan €0.9637 31 Dec €0.7918

2004 14 May €0.8473 28 Dec €0.7335

2005 15 Nov €0.8571 03 Jan €0.7404

2006 02 Jan €0.8456 05 Dec €0.7501

2007 12 Jan €0.7756 27 Nov €0.6723

2008 27 Oct €0.8026 15 Jul €0.6254

2009 04 Mar €0.7965 03 Dec €0.6614

2010 08 Jun €0.8374 13 Jan €0.6867

Source: Euro exchange rates in USD, ECB

Currency units per U.S. dollar, averaged over the year.[73] * = value at start of year.

1970* 1980* 1985* 1990* 1993 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

0.855 0.938 1.083 1.117 1.057 0.883 0.804 0.803 0.796 0.729 0.679 0.717
Euro - - - 0.8343
1 7 2 1 8 3 0 3 0 3 1 6

Japanes 111.0 113.7 107.8 121.5 125.2 115.9 108.1 110.1 116.3 117.7 103.3
357.6 240.45 250.35 146.25 93.68
e yen 8 3 0 7 2 4 5 1 1 6 9

Pound 0.416 0.4484[74 0.8613[74 0.666 0.618 0.659 0.694 0.665 0.611 0.545 0.549 0.542 0.499 0.539 0.638
] ] 0.6207
sterling 4 0 4 8 6 6 7 6 3 5 5 2 5

Canadia 1.290 1.485 1.485 1.548 1.570 1.400 1.301 1.211 1.134 1.073 1.066 1.141
1.081 1.168 1.321 1.1605
n dollar 2 8 5 7 4 8 7 5 0 4 0 2

Mexican 2,679.5 3.123 10.79 11.29 10.89 10.90 10.92 11.14 13.49
- 22.8001 206.971 1 9.553 9.459 9.337 9.663
peso 7 3 0 4 6 8 3 8

Renmin 5.762 8.278 8.278 8.277 8.277 8.277 8.276 8.193 7.972 7.605 6.947 6.830
- 1.7050 2.9366 4.7832
bi yuan 0 3 4 0 1 2 8 6 3 8 7 7

Singapo 1.615 1.695 1.736 1.793 1.790 1.742 1.690 1.663 1.588 1.506 1.414 1.454
- - 2.179 1.903
re dollar 8 1 1 0 8 9 2 9 2 5 0 3

Source: Last 4 years 2005-2002 2003-2000 1996-1999 1993-1996 1990 1970-1992 1970-1985 Canada, China, Mexico

1. Mexican peso values prior to 1993 revaluation.

EXCHANGE RATES

A sharp turnaround began in late 2008 with the onset of the global financial crisis. As
investors sought out safe-haven investments in U.S. treasuries and Japanese government
bonds from the financial turmoil, the Japanese yen and United States dollar sharply rose
against other currencies, including the euro.[69] At the same time, however, many
countries such as China,[70] India andRussia announced their intentions to diversify their
foreign reserve portfolios away from the U.S. dollar.

The European sovereign debt crisis that unfolded in 2010 sent the euro falling to a four-
year low of $1.1877 on June 7, as investors considered the risk that
certain Eurozone members may default on their government debt.[72] The euro's decline in
2008-2010 had erased half of its 2000-2008 rally.

ISO 4217 CODE USD

OFFICIAL USERS UNITED STATES ,
ECUADOR,EL SALVADOR,
15 US TERRITORIES
UNOFFICIAL USERS 12 OTHER COUNTRIES
4 OTHER NON U.S.
TERRITORIES
INFLATION 1.15% , AUGUST 2010
METHOD CPI
PEGGED BY 23 CURRENCIES
SUBUNIT 1/10 – DIME, 1/100- CENT, 1/1000-
MILL
UNITED STATES MINOR OUTLYING
ISLANDS

The United States Minor Outlying Islands, a statistical designation defined by the
International Organization for Standardization's ISO 3166-1 code, consists of nine United
States insular areas in the Pacific Ocean and Caribbean Sea: Baker Island, Howland
Island, Jarvis Island, Johnston Atoll, Kingman Reef, Midway Islands, Navassa Island,
Palmyra Atoll, and Wake Island. The Caribbean territories of Bajo Nuevo Bank and
Serranilla Bank are also sometimes included by the U.S. government, but its claims are
disputed by other countries.

Among them, Palmyra Atoll is the only incorporated territory. As of 2008, none of the
islands has any permanent residents. The only human population consists of temporarily
stationed scientific and military personnel. The 2000 census counted 315 people on
Johnston Atoll and 1 person on Wake Island.There has been no modern indigenous
population, except at the 1940 census. In 1936 a colonization scheme began to settle
Americans on Baker, Howland, and Jarvis, but all three islands were evacuated in 1942
as a result of World War II.

The islands are grouped together as a statistical convenience. They are not administered
collectively, nor do they share a single cultural or political history beyond being
uninhabited islands under the sovereignty of the United States.

They are collectively represented by the ISO 3166-1 alpha-2 code UM. The individual
islands have ISO 3166-2 numerical codes, see ISO 3166-2:UM. The Internet country
code top-level domain (ccTLD) ".um" has historically been assigned to the islands;
however, the .um ccTLD was retired in January 2007.

The ISO introduced the term "United States Minor Outlying Islands" in 1986. From 1974
until 1986, five of the islands (Baker Island, Howland Island, Jarvis Island, Palmyra Atoll
and Kingman Reef) were grouped under the term United States Miscellaneous Pacific
Islands, with ISO 3166 code PU. The code of Midway Atoll was MI, the code of
Johnston Atoll was JT, and the code of Wake Island was WK.

UNITED STATES DOLLAR

The United States dollar is the official currency of the United States
of America. The U.S. dollar is normally abbreviated as the dollar
sign, $, or as USD or US$ to distinguish it from other dollar-
denominated currencies and from others that use the $ symbol. It is
divided into 100 cents.
The U.S. dollar is the currency most used in international
transactions and is one of the world's reserve currencies. Several
countries use it as their official currency, in many others it is the de
facto currency, and it is also used as the sole currency in some British
Overseas Territories.
HISTORY
The first dollar coins issued by the United States Mint (founded 1792) were
similar in size and composition to the Spanish dollar. The Spanish, U.S. silver
dollars, and Mexican silver pesos circulated side by side in the United States,
and the Spanish dollar and Mexican peso remained legal tender until 1857.
The coinage of various English colonies also circulated. The lion dollar was
popular in the Dutch New Netherland Colony (New York), but the lion dollar
also circulated throughout the English colonies during the 17th century and
early 18th century. Examples circulating in the colonies were usually worn so
that the design was not fully distinguishable, thus they were sometimes
referred to as "dog dollars".

The U.S. dollar was created and defined by the Coinage Act of 1792. It
specified a "dollar" to be based in the Mexican peso at 1 dollar per peso and
between 371 and 416 grains (27.0 g) of silver (depending on purity) and an
'eagle" to be between 247 and 270 grains (17 g) of gold (again depending on
purity). The choice of the value, 371 grains arose from Alexander Hamilton's
decision to base the new American unit on the average weight of a selection
of worn Spanish dollars (and later Mexican peso). Hamilton got the treasury
to weigh a sample of Spanish dollars and the average weight came out to be
371 grains. A new Spanish dollar was usually about 377 grains in weight, and
so the new U.S. dollar was at a slight discount in relation to the Spanish
dollar. The gold equivalent of the Spanish dollar in sterling was ₤1 = $4.80,
whereas the gold equivalent of the U.S. dollar was ₤1 = 4.86⅔. This
exchange rate with sterling remained right up until Britain abandoned
the gold standard in 1931.

The Coinage Act of 1792 set the value of an eagle at 10 dollars, and the
dollar at 1/10th eagle. It called for 90% silver alloy coins in denominations of
1, 1/2, 1/4, 1/10, and 1/20 dollars; it called for 90% gold alloy coins in
denominations of 1, 1/2, 1/4, and 1/10 eagles.

The value of gold or silver contained in the dollar was then converted into
relative value in the economy for the buying and selling of goods. This
allowed the value of things to remain fairly constant over time, except for the
influx and out flux of gold and silver in the nation's economy. The early
currency of the USA did not exhibit faces of presidents, as is the custom now.
In fact, George Washington was against having his face on the currency, a
practice he compared to the policies of European monarchs. The currency as
we know it today did not get the faces they currently have until after the
early 20th century; before that "heads" side of coinage used profile faces and
striding, seated, and standing figures from Greek and Roman mythology and
composite native Americans. The last coins to be converted to profiles of
historic Americans were the dime (1946) and the Dollar (1971).
CONTINENTAL CURRENCY
In 1775, the United States and the individual states began issuing
"Continental Currency" denominated in Spanish dollars and (for the issues of
the states) the £sd currencies of the states.

The continental currency suffered from printing press inflation and was
replaced by the silver dollar at the rate of 1 silver dollar = 1000 continental
dollars.

SILVER AND GOLD STANDARDS

From 1792, when the Mint Act was passed, the dollar was pegged to silver at
371.25 grains (24.056 g), or 24.75 grains (1.604 g) of gold. Many historians
erroneously assume gold was standardized at a fixed rate in parity with
silver; however there is no evidence of Congress making this law. This has to
do with Alexander Hamilton's suggestion to Congress of a fixed 15:1 ratio of
silver to gold, respectively. The gold coins that were minted however, were
not given any denomination whatsoever and traded for a market value
relative to the Congressional standard of the silver dollar. 1834 saw a shift in
the gold standard to 23.2 grains (1.50 g), followed by a slight adjustment to
23.22 grains (1.505 g) in 1837 (16:1 ratio).
In 1862, paper money was issued without the backing of precious metals, due
to the Civil War. Silver and gold coins continued to be issued and in 1878 the
link between paper money and coins was reinstated. This disconnection from
gold and silver backing also occurred during the War of 1812. The use of
paper money not backed by precious metals had also occurred under the
Articles of Confederation from 1777 to 1788. With no solid backing and being
easily counterfeited, the continentals quickly lost their value, giving rise to
the phrase "not worth a continental". This was a primary reason for the "No
state shall... make anything but gold and silver coin a tender in payment of
debts" clause in article 1, section 10 of the United States Constitution.

Obverse of rare 1934 $500 Federal Reserve Bill, featuring a portrait of

President William McKinley.

Reverse of $500 Bill

The Gold Standard Act of 1900 abandoned the bimetallic standard and
defined the dollar as 23.22 grains (1.505 g) of gold, equivalent to setting the
price of 1 troy ounce of gold at $20.67. Silver coins continued to be issued for
circulation until 1964, when all silver was removed from dimes and quarters,
and the half dollar was reduced to 40% silver. Silver half dollars were last
issued for circulation in 1969.

Gold coins were confiscated in 1933 and the gold standard was changed to
13.71 grains (0.888 g), equivalent to setting the price of 1 troy ounce of gold
at $35. This standard persisted until 1968. Between 1968 and 1975, a variety
of pegs to gold were put in place. The price was at $42.22 per ounce before
August 15, 1971 saw the U.S. dollar freely float on currency markets.

According to the Bureau of Engraving and Printing, the largest note it ever
printed was the $100,000 Gold Certificate, Series 1934. These notes were
printed from December 18, 1934 through January 9, 1935, and were issued
by the Treasurer of the United States to Federal Reserve Banks only against
an equal amount of gold bullion held by the Treasury. These notes were used
for transactions between Federal Reserve Banks and were not circulated
among the general public.
UNITED ARAB EMIRATES DIRHAM

The dirham (Arabic: ‫( )درهم‬sign: ‫إ‬.‫ ;د‬code: AED) is the currency of the United Arab
Emirates. The ISO 4217 code (currency abbreviation) for the United Arab Emirates
dirham is AED. Unofficial abbreviations include DH or Dhs. The dirham is subdivided
into 100 fils (‫)فلس‬.

HISTORY

The United Arab Emirates dirham was introduced December 1971. It replaced the Qatar
and Dubai riyal at par. The Qatar and Dubai riyal had circulated since 1966 in all of the
emirates except Abu Dhabi, where the dirham replaced the Bahraini dinar at 1 dirham =
0.1 dinar. Before 1966, all the emirates that were to form the UAE used the Gulf rupee.
As in Qatar, the emirates briefly adopted the Saudi riyal during the transition from the
Gulf rupee to the Qatar and Dubai riyal.

On January 28, 1978, the dirham was officially pegged to the IMF's Special Drawing
Rights (SDRs)[1]. In practice, it is pegged to the U.S. dollar for most of the time[2]. Since
November 1997, the dirham has been pegged to the 1 U.S. dollar = 3.6725 dirhams[3],
which translates to approximately 1 dirham = 0.272294 dollar.

The name Dirham derives from the Greek word Drachmae, literally meaning "handful",
through Latin.[4] Due to centuries of old trade and usage of the currency, dirham survived
through the Ottoman regime.

COINS

In 1973, coins were introduced in denominations of 1, 5, 10, 25, 50 fils, and 1 dirham.
The 1, 5 and 10 fils are struck in bronze, with the higher denominations in cupro-nickel.
The fils coins were same size and composition as the corresponding Qatar and Dubai
dirham coins. In 1995, the 50 fils and 1 dirham coins were reduced in size, with the new
50 fils being curve-equilateral-heptagonal shaped.
The value and numbers on the coins are written in Eastern Arabic numerals and the text is
in Arabic. The 1, 5 and 10 fils coins are rarely used in everyday life, so all amounts are
rounded up or down to the nearest multiples of 25 fils. The 1 fils coin is a rarity and does
not circulate significantly. In making change there is a risk of confusing the old 50 fils
coin for the modern 1 dirham coin because the coins are almost the same size.

Since 1976 the Central Bank of the United Arab Emirates has minted several
commemorative coins celebrating different events and rulers of the United Arab
Emirates. For details, see Commemorative coins of the United Arab Emirates dirham.

ISSUES WITH FRAUD

By August 2006 it became publicly known that the Philippine one peso coin is the same
size as one dirham. As 1 peso is only worth 8 fils, this has led to vending machine fraud
in the U.A.E. The Australian ten cent coin is the same size, shape and weight as the
U.A.E. Dirham. Pakistan's 5 Rupee coin, Omani 50 Baisa coin and the Moroccan Dirham
is also the same size as U.A.E. one Dirham coin. A falcon watermark is present on all
dirham notes in order to prevent fraud.

BANKNOTES

In 1973, the U.A.E. Currency Board introduced notes in denominations of 1, 5, 10, 50,
100 and 1000 dirham. A second series of note was introduced in 1982 which omitted the
1 and 1000 dirham notes. 500 dirham notes were introduced in 1983, followed by 200
dirham in 1989. 1000 dirham notes were reintroduced in 2000. Banknotes are currently
available in denominations of 5 (brown), 10 (green), 20 (light blue), 50 (purple), 100
(pink), 200 (green/brown), 500 (navy blue) and 1000 (greenish blue) dirham.

The obverse texts are written in Arabic with numbers in Eastern Arabic numerals; the
reverse texts are in English with numbers in Arabic numerals. The 200 dirham
denomination is scarce as it was only produced in 1989; any circulating today come from
bank stocks. The 200 dirham denomination has since been reissued and is now in
circulation since late May 2008 - it has been reissued in a different colour; Yellow/Brown
to replace the older Green/Brown.

1982 Series
Image Main Dimensions Description
Value
Obverse Reverse Color (mm) Obverse Reverse
5 Brown 157 x 67 Sharjah a landscape
Dirham Central in the
Souq also Northern
known as Emirates
 Islamic
Souq, the
Blue Souq
or the cental
market
(souq
meaning
market in
arabic)
The
Khanjar
(Arabic:
10
Green 147 x 62 ‫ )خنجر‬is the a pilot farm
Dirham
traditional
dagger of
Oman
the front
Traditional
face of the
trading
20 Dubai
Blue 149 x 63 Dhow
dirham Creek Golf
(called
and Yacht
Sama'a)
Club
Oryx (a
pre-Islamic
50 type of
Purple 151 x 64 fort in Al
dirham antelope) (
Ain
‫)غزال‬
Dubai
World
100 Trade
Pink 155 x 66 Fahidi Fort
dirham Centre
building
shown
Central
200 Green / the Zayed Bank of the
157 x 67
dirham Brown Sports City UAE
Building
The
Jumeirah
Mosque,
500 Navy a falcon's one of the
159 x 68
dirham blue head most well
known
mosques in
the UAE
1000 Greenish- Al Hosn Abu Dhabi
163 X 70
dirham blue Palace Corniche
EXCHANGE RATES
 URUGUAYAN PESO
Uruguayan peso has been a name of the Uruguayan currency since Uruguay's settlement
by Europeans. The present currency, the peso uruguayo (ISO 4217 code: UYU) was
adopted in 1993 and is subdivided into 100 centésimos

HISTORY

Uruguay obtained monetary stability in 1896, based on the gold standard. This favorable
state of affairs ended after World War One. An unsettled period followed. Economic
difficulties after World War Two produced inflation, which became serious after 1964
and continued into the 1970s.

The peso was replaced in November 1973 by the nuevo peso (new peso; ISO 4217 code:
UYN) at a rate of 1 new peso for 1000 old pesos. The nuevo peso was also subdivided into
100 centésimos.

After further inflation, the peso uruguayo (ISO 4217 code: UYU) replaced the nuevo peso
on March 1, 1993, again at a rate of 1 new for 1000 old.
Uruguayans became accustomed to the constant devaluation of their currency.
Uruguayans refer to periods of real appreciation of the currency as atraso cambiario,
which literally means that "the exchange rate is running late". As a consequence of the
instability of the local currency, prices for most big-ticket items (real estate, cars and
even executives' salaries) are denominated in U.S. dollars.

During the military rule, the peso was on a crawling peg to the dollar. A table of the
future value of the dollar was published daily by the government (called the tablita). In
1982, the currency was devalued ("the tablita was broken"), throwing thousands of
companies and individuals into bankruptcy. In the 1990s, a new mechanism to provide
predictability was introduced, this time in the form of a sliding range, with top and
bottom margins, at which the government would intervene. In 2002, after a banking crisis
and amid a huge budget deficit, the currency was again allowed to float, losing almost
50% of its value in a couple of weeks, and, again, throwing into bankruptcy thousands of
companies and individuals who held debts denominated in US dollars.

In 2004 a phenomenon completely new to most Uruguayans developed: the currency

appreciated in nominal terms against the US dollar, going from 30 to 24 pesos to the
dollar. By 2008 the peso reached 19 to the US dollar, recovering more than half of its loss
during the crisis. This revaluation brought protests from the industrial sector, which felt
that it lost competitiveness. The government hopes that a floating currency will "de-
dollarize" the economy. Uruguay does not seem to have found a mechanism that provides
the exchange rate some level of predictability, while at the same time allowing the
country to adapt its prices so that its exports remain competitive

COINS

In 1994, stainless-steel 10, 20 and 50 centésimos and brass 1 and 2 pesos uruguayos were
introduced. 5 and 10 pesos uruguayos were introduced in 2003 and 2000, respectively.
Coins in circulation are:

• 1 peso uruguayo
• 2 pesos uruguayos
• 5 pesos uruguayos
• 10 pesos uruguayos

In July 2010, 50 centésimos coins were withdrawn from circulation

BANKNOTES

In 1995-1996, banknotes in denominations of 5, 10, 20, 50, 100, 200, 500 and 1000 pesos
uruguayos were introduced, followed by 2000 pesos uruguayos in 2003. Banknotes in
circulation are:
 • 20 pesos (Juan Zorrilla de San Martín).
• 50 pesos (José Pedro Varela)
• 100 pesos (Eduardo Fabini)
• 200 pesos (Pedro Figari)
• 500 pesos (Alfredo Vázquez Acevedo)
• 1000 pesos (Juana de Ibarbourou)
• 2000 pesos (Dámaso Antonio Larrañaga)

The 5 peso and 10 peso banknotes have been withdrawn from circulation, given the
introduction of the coins of the same value.