Currency Transactions

transactions regulated by national legislation or international agreements and involving currency valuables (seeCURRENCY).

Foreign-exchange and financial relations originating in the course of economic, scientific and technological, or political and cultural cooperation among states assume the form of currency transactions. Currency transactions are often a means by which obligations are met by parties engaging in trade, payment, credit, and other international relations. For example, currency transactions are involved in making payments for the import and export of goods and foreign tourism. Depending on the purpose and character of the currency transaction, the principals may be states, national and international banks, and foreign trade and certain other organizations, as well as private citizens. In international payments, the forms of currency transactions include letters of credit, collection operations, and exchange authorization. Transactions between banks include conversion operations (the purchase of one currency and the sale of another) and deposit operations (transactions related to the placement of temporarily free funds). Relations between individuals and banks involve transfer or conversion authorizations and the buying and selling of foreign currency. The procedure and methods for carrying out currency transactions are determined by the foreign-exchange legislation of each country, in conformity with the principles of the state foreign-exchange monopoly.