Hard currency

Hard currency is any currency that is widely accepted for settling payment transactions. It has the following characteristics:

  • The currency tends not to fluctuate much over the short term

  • The currency is highly liquid in the foreign exchange market

These characteristics give companies confidence that hard currencies can be used to settle transactions without having to worry about unusual exchange rate fluctuations.

A hard currency generally originates in a country that has a robust economy and stable political environment. Examples of hard currencies are the U.S. dollar, British pound, European Euro, Swiss Franc, and Japanese yen. Hard currencies are more valuable than the currencies of other countries.

Related Courses

Corporate Cash Management 
Foreign Currency Accounting