Valuuttanimellisarvo

Valuuttanimellisarvo refers to the face value of a currency, which is the printed or engraved amount on a banknote or coin. This nominal value is the amount officially declared by the issuing authority, such as a central bank or government, and is used for transactions within the economy. For example, a 10 Euro banknote has a nominal value of 10 Euros.

The nominal value of a currency is distinct from its intrinsic value, which is the value of the material from which the currency is made. For most modern currencies, especially paper money, the intrinsic value is significantly lower than the nominal value. This is known as fiat money, where the value is derived from government decree and public trust rather than a physical commodity.

In international finance, the nominal value is also used when referring to exchange rates. The nominal exchange rate is the rate at which one country's currency can be exchanged for another country's currency, expressed as a ratio of their face values. For instance, if the nominal exchange rate between the US Dollar and the Euro is 1 USD = 0.90 EUR, it means that one US Dollar can be exchanged for 0.90 Euros based on their face values.

The nominal value is crucial for the functioning of monetary systems, enabling the smooth exchange of goods and services. It provides a standardized unit of account and a medium of exchange that is widely accepted within a jurisdiction. Changes in the nominal value of a currency can occur through redenomination, where old notes are exchanged for new ones at a predetermined ratio, often to simplify calculations or combat hyperinflation.