Why is it in the News?

Recently, the Global Trade Research Initiative (GTRI) said in a statement that Conditions are not ripe to make INR a hard currency.

What is Hard Currency?

• Usually, developed countries issue hard currency, and this currency is easier to trade and receive funds from other countries or investors from other nations.

Key characteristics of hard currencies:

• Hard currency means a stable currency, and its value does not fluctuate much in the international markets.
• It makes hard money currency easily tradable.
• It is issued by a sound economy. Developed countries issue hard currency and it is accepted by all nations across the world.
• It is highly liquid and several countries prefer to accept hard currency instead of local currency as it has lesser fluctuations and can be easily converted to local currency.
• Hard currency is universally accepted and international investors have a sense of faith in hard currency for trading.
• Countries across the globe consider hard currency as a foreign currency reserve, further adding to its value.
• As hard currency is easily convertible and stable, it is widely used in international exchanges.
• The value of the hard currency does not change much in response to global events.
• When domestic currencies struggle, people start holding on to hard currencies to protect their wealth.

Examples of hard currencies:

• US dollar (USD)
• Euro (EUR)
• Japanese yen (JPY)
• British pound (GBP)
• Swiss franc (CHF) etc.