Currency Substitution

Business, Legal & Accounting Glossary

Definition: Currency Substitution


Currency Substitution


Full Definition of Currency Substitution


The practice by the citizenry of a country to hold the currency of a foreign country in addition to its domestic currency as a store of value or as an additional medium of exchange. Historically, governments and citizens of developing countries have turned to foreign currencies, primarily the U.S Dollar, as a substitute for their declining currencies. This typically resulted in increased volatility of their currencies exchange rate making it difficult for their central banks to intervene with stabilizing monetary policies.


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Definition Sources


Definitions for Currency Substitution are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.