Question:
What is the term used in the foreign exchange market which denotes the currency in which the highest faith is shown and is needed by every economy?
What is the term used in the foreign exchange market which denotes the currency in which the highest faith is shown and is needed by every economy?
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Hard currency = global trust + stable economy → used in reserves, trade, and investment.
Updated On: Aug 11, 2025
- Hard Currency
- Hot Currency
- Soft Currency
- Cheap Currency
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The Correct Option is A
Solution and Explanation
A hard currency is stable, globally trusted, and widely used for international transactions.
It comes from a politically and economically stable country.
Examples: US Dollar, Euro, Japanese Yen.
In contrast:
“Hot currency” refers to capital quickly moving between countries.
“Soft currency” is unstable and not widely accepted.
“Cheap currency” is not a standard term.
Hence, (A) is the correct term.
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