Currency Exchange through Tavex

What is currency?

In everyday language, “currency” refers to a country’s monetary unit. From an economic perspective, however, the term has a broader meaning. Let us examine its definition and parameters – including the concept of the exchange rate and understand why, in practice, the Romanian leu is also a currency.

Definition of “monedei” (currency)

A currency is a country’s legal tender and monetary unit – this includes banknotes and coins. That is the definition found in Romanian monetary law as well.

Different types exist, depending on the criteria applied. Based on this definition, the Romanian leu is Romania’s national currency, while the US dollar serves as an international reserve currency.

At the time of writing, the euro is both a common currency and an international one, given that it is not legal tender in this country.

Definition of “valutei” (foreign currency)

The Romanian language possesses a specific feature not found in other languages: a distinction is made between *monedă* (currency/coin) and *valută* (foreign currency). Essentially, all *valute* are *monede*, but the reverse is not true; *valută* refers strictly to foreign currencies, excluding the Romanian leu.

Thus, for Romanians, any form of money other than the national currency is considered *valută*.

The term derives from the Latin *valere*, meaning “to have value.” Following the Renaissance a period when Italian city-states were Europe’s leading commercial powers the term spread to the Romance languages ​​of the Old Continent, subsequently passing from these into Slavic languages ​​as well.

Currency rate

To get an idea of ​​the value of a currency relative to others, we express it through an exchange rate. Exchange rates show how many units of one currency can be purchased for one unit of another currency.

In our country, National Bank Of Romania publishes the reference exchange rates for major currencies against the leu, as well as the price of gold for the day, on every business day.

It is much easier to calculate the amount of money you will receive by using a currency calculator. As a reputable dealer, Tavex provides a free online calculator for our customers and visitors. In addition to the currency calculator, we clearly display our buying and selling rates.

Name and currency code

In addition to its exchange rate, every currency has a name and a unique three-letter code used worldwide. This is because monetary systems sometimes undergo significant changes while retaining the currency’s name. Romania is a prime example of this.

Following the country’s hyperinflation in the late 20th century, the currency underwent redenomination, with 10,000 “old lei” becoming equivalent to 1 “new leu.” During this process, the currency code was also changed from ROL to RON.

These abbreviations stood for “Romanian Leu” (ROL) and “Romanian New Leu” (RON, following the redenomination), respectively. The latter remains in use today.

Foreign exchange market

Currency exchange rates fluctuate constantly, not just once a day. Various participants in the global foreign exchange market can either benefit or suffer as a result. It is a marketplace where individuals, central banks, companies, investment funds, currency traders and others constantly exchange funds.

Their objectives may include speculation, borrowing, project financing and reserve accumulation. The foreign exchange market is vital to the global economy and the exchange of goods.

As the US dollar is the world’s reserve currency, it is the most intensively traded, typically in the following currency pairs:

• USD/EUR – with the euro;
• USD/JPY – with the Japanese yen;
• USD/GBP – with the British pound;
• USD/CHF – with the Swiss franc;
• USD/CAD – with the Canadian dollar.