Currency coding is needed for brevity. It can be seen in various banking documents and specialized resources (Internet, periodical media, information on television and the like). There is a standard that is used around the world and is considered universally recognized. Typically, the currency designation is classified in the form of a table, divided into four most important points:
- Currency in the national language of the state where the direct banking transaction or exchange trading is conducted.
- The name of the same equivalent in English.
- A letter code consisting of three elements. It abbreviates the abbreviation of the currency.
- A digital code that includes three or two characters. It is used to simplify mainly in banking documentation.
In addition, when characterizing a monetary unit, additional parameters are sometimes indicated: a list of countries where it is legally recognized as a means of payment (convertibility), component (capacity), and other indicators. The most obvious example, in which the designation of currencies appears, is a quote or a monetary rate. It usually indicates the currency pair and its current value.
It is worth noting that the designation of currencies greatly simplifies the work of banks and other financial institutions. In addition, we must not forget about the speed of decision-making during active trading. Gradually, such an encoding is perceived at a subconscious level, which leads to the exclusion of laborious memorization of necessary data.
In this sense, the Forex trading market is very indicative, the exchange rate on which is indicated only in this way. Below are the most common examples of monetary symbols used at the auction:
- US dollar - USD, stands for United States Dollar;
- Swiss franc - CHF - Confederation Helvetica Franc;
- British pound - GBR - Great British Pound;
- Japanese Yen - JPY - Japanese Yen.
The designation of currencies has its exceptions to generally accepted norms. For example, the Russian currency is not designated as the expected RUB, but as RUR, and the euro, which is the universal means of payment for several countries at once, has the abbreviation EUR.
If we talk about exchange rates, they show the ratio of funds of different countries in relation to each other. Their codes are presented as six-letter words consisting of the designations of two currencies, usually separated by a sign or “-” symbol. Moreover, the most important payment unit is always put in the first place.
In conclusion, I want to note that any financial abbreviation denoting a particular currency is very important. Especially in our time, when the development of Internet technologies is gradually reaching a new level. After all, a person is not always able to keep up with various changes in the trends of any field, but he knows how to adapt and improve in an existing environment, and the brevity of currency symbols simplifies this task. In addition, according to the classics, such an encoding is a talented invention, and not just an engine of laziness.