World Currency System and Demand of currencies in Global Transition period

Abstract

This longitudinal study focuses on the Globally highly trading currencies and its impact on the position of the holding country in the transition period. Globalisation provided an opportunity for business to work in multiple countries. In the process, cross border transactions go through global currency system. This study tries to understand how global currency system works and how financial leadership gets affected by currency system.

How acceptability of the currency worldwide and reserve currency status of the currency helps to take the lead position in the world. Existing currency system is going from its transition period after successful proceeding of 80 years. There are many currencies available in the system, every country uses different currency which is been traded in the foreign exchange market. Price of each currency is volatile as per the demand of the currency for trade and saving, availability of natural resources and productivity of the nation, which further reflects in the purchasing power of the currency.

Different currencies are available for cross border transactions, but most invoicing currency is United states dollar.  Even though Price of currency is high in currency market, its purchasing power is reducing, it creates imbalance in the economy. Still, it is most traded currency in the world. Time series analysis method used to analyse the data. There are 70+ currencies available but 11 main highly used currencies in the world last few years