Convertibility
The quality of being able to be exchanged for something else, especially currency or securities.
Refers to the ease with which a currency can be exchanged for another currency or for gold, without restrictions.
Word relationships
- exchangeability: More general, refers to the ability to be exchanged for anything.
- inconvertibility: The inability of a currency to be freely exchanged for other currencies.
Word family
- convertible (adjective): able to be changed into something else.
- convert (verb): to change the form, character, or function of something.
Collocations
- full convertibility
- limited convertibility
- currency convertibility
- gold convertibility
Example sentences
- "The full convertibility of a currency is crucial for its role in international trade and investment." Discussing international finance.
- "Many developing nations aim to achieve greater convertibility for their local currency to attract foreign capital." Analyzing economic policy.
Memory hook
CONVERTIBILITY is the ability to 'CONVERT' one currency into another easily. Think of a convertible car that can 'turn' from a closed car to an open one. Turnable money
When not to use
Do not use 'convertibility' when referring to the act of exchanging money; 'foreign exchange' or 'currency exchange' is more appropriate.
Fun facts
- The Bretton Woods system (1944-1971) established a system of fixed exchange rates where currencies were convertible into US dollars, and the dollar was convertible into gold.
Related words
Explore more words
liquidity, conversion, liberated, Purchasing power, flexibility, mobility
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