hard currency

noun

Definition of hard currency

: money that comes from a country with a strong government and economy and that is not likely to lose its value

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Last Updated

31 Oct 2019

Cite this Entry

“Hard currency.” The Merriam-Webster.com Dictionary, Merriam-Webster Inc., https://www.merriam-webster.com/dictionary/hard%20currency. Accessed 8 December 2019.

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hard currency

noun

Financial Definition of hard currency

What It Is

Hard currency is currency that has been adopted as an acceptable payment method in multiple countries.

How It Works

Hard currencies are generally issued by developed countries that have a strong industrial economy accompanied by a stable government. The most common hard currencies include the U.K. pound sterling (GBP), the euro (EUR) and U.S. dollar (USD).

Why It Matters

Hard currencies display high stability and typically experience only minor short-term fluctuations in the foreign exchange market. Hard currencies are frequently used to denominate commodities and serve as a benchmark for foreign exchange markets. As a result, instability in hard currencies can lead to a loss in confidence with worldwide effect on markets.

Source: Investing Answers

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