What is a soft currency?

The soft currency is a currency with a widely fluctuating value that reflects the destabilized economic system. In general, this type of currency is considered less desirable and people avoid investing in or deal with it if possible. Combat nations tend to have a soft currency rather than a hard currency, because the economies are very sensitive to political unrest and civic unrest.

In principle, the soft currency is a weak currency. Compared to standards, such as the United States and Euro dollar, it also does not work and a radically fluctuating value can make it difficult to replace or trade for hard currency. Many nations with a soft currency also create an artificially high exchange rate, making people even more reluctant to convert, and when people turn their currency and then try to convert it back, they can lose money in this process, due to the value of the soft currency fluctuations.

In some countries, the mixture is soft and hard currency. This was common in many Soviet block countries in 80 years. Citizens in these countriesThey used a soft currency associated with the national economy, while visitors had a hard currency they could spend in certain places. Visitors were usually reluctant to transform their hard currency into a local currency, and some governments specifically banned their citizens in possession of a hard currency so that valuable hard currencies did not fall into the hands of the inhabitants of the Soviet blocks. This could be very frustrating for visitors because they were not allowed to pay for many goods and services with hard currency.

It is interesting that in situations where a soft and hard currency is mixed, the soft currency usually becomes the dominant currency in the economy, because people of a horde hard currency rather than spend it. This means that money in circulation tends to be a primary form of soft currency, because the hard currency is not available. This can make it difficult to transfer between currency systems. Prices can also be cited differently, depending on the type of currency someone pays.

soft currencies are not supported by a commodity standard such as gold or silver, although it does not getThe liquid does not necessarily change soft. In some regions, people do not accept a soft currency as a legal payment and force people who hold a soft currency to turn it into a hard currency before they have access to goods and services. This can be a significant obstacle to people who are paid in weak currency, as they can find many products from their price range.