[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]
Re: the theory of split currency
On Mon, 30 Sep 1996, James A. Donald wrote:
> Fred Foldvary <[email protected]> wrote:
> > Is there a name for a dual or split currency, in which
> > there is one currency for domestic use and another, different
> > appearing, currency for foreign usage?
> >
> > Does anyone know of any country which has had such a
> > split currency?
>
> Many third world nations employed this system, one currency
> for internal use only, and one currency for international
> transactions. The international currency was sometimes
> denominated in hard currency, and reasonably convertible into it.
>
<some snipped>
>
> I speculate that this is because people find that they *must*
> obtain foreign currency, the internal currency being
> unspendable, and any method available to them for obtaining foreign
> currency is a criminal offense.
>
This is just another method of a fixed exchange rate system, with the
inevitable resulting black market for foreign currency.
Just my US$0.02 :)
-r.w.