Adjustment of currency convertibility

Although it is a very important economic issue, the currency convertibility has become one of the most neglected issues in the modern economic theory, particularly after the abolition of dollar convertibility into gold in 1971. Nowadays, it is said that the currency convertibility is a technique for exchange of one currency to other currencies at floating rates in the cross rates of exchange in the world and it is treated as a consequent solution into the evolution of currency convertibility. However, the facts are contrary to the treatment of such a kind. The exchange of one currency to other currencies at floating rates is a digression in the evolution of currency convertibility because its effects upon the rationality of the process of international division of labour have been corrected by this type of convertibility. This is a priority function within the original meaning of currency convertibility. However, this function cannot be fulfilled effectively without creating a global currency by which the national currencies will be connected to fixed, but adjustable exchange rates. Key words: currency convertibility, dematerialization of money, system of gold standard, fixed rates, floating rates, global currency