Fixed exchange rates between currencies

Currency Zone

When talking about the currency or zone, so herewith the geographic scope of a particular currency is designed. It may include a state (national currency) or supranational union of several states with a common currency (often already spoken with convertibility and fixed exchange rates between currencies related to supra-national currency). Also, a regional currency zone to imagine, at least in the exchange of money.

Very interesting - not only for the expert - in this context is the theory for determining the optimal currency zone. The spectrum ranges from proposals for regionalization of the system (ie using multiple currencies in the country) the use of world currency (keyword "Globo"). If someone realizes the development in recent decades, so basically and phenomena are present: a supranational currency areas such as Euro-zone is created, while others (eg rubles to the former Soviet Union) broke. The basic tendency towards supra-national solutions can not be denied, however, given the reduction in transaction costs due to the use of a common currency, of course, is an influential argument.