International Financial system: The financial system is a set of institutional arrangements through which financial surpluses in the economy

are mobilized from surplus units and transferred to deficit spenders. The process of fund mobilization from surplus units and subsequent transferring the same to deficit units in the international setting is known as International Financial System. Money: A current medium of exchange in the form of coins and banknotes. What are the Forms of Money? In the modern monetary systems, there are three forms of money in actual use: (i) Metallic Money, (ii) Paper Money, and (iii) Credit Money. The first two kinds of money are in the form of currency money and the last one is credit or bank money. Metallic Money: Metallic money refers to coins made out of various metals like gold, silver, bronze, nickel, etc. Since all types of coins are issued by the state authorities either the Treasury or the Central Bank of the country they are regarded as legal tender. Legal tender money's acceptability is sanctioned of backed up by law; Paper Money: Paper money consists of currency notes issued by the State Treasury or the Central Bank of the country. Credit Money: In modern economic societies, with the development of banking activity, along with paper money, another form of convertible money has developed in the form of credit money or bank money. Bank demand deposits, withdrawal by issuing cheques, have started functioning as money, and cheques are now conventionally accepted as a mode of payment by the business community in general. It must be noted that a cheque by itself is just a credit instrument. Actually it is the bank deposit behind the cheque that serves as money.

Special drawing rights Special drawing rights (SDRs) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). Not a currency, SDRs instead represent a claim to currency held by IMF member countries for which they may be exchanged. As they can only be exchanged for Euros, Japanese yen, pounds sterling, or US dollars, SDRs may actually represent a potential claim on IMF member countries' nongold foreign exchange reserve assets, which are usually held in those currencies. While they may appear to have a far more important part to play, or, perhaps, an important future role, being the unit of account for the IMF has long been the main function of the SDR. International monetary system A monetary system centers around medium of exchange. International monetary system therefore, focuses on International medium of exchange. IMS essentially includes currency convertibility and exchange rate policies and systems of different national monetary systems. A financial market is a market in which people and entities can trade financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand. Securities include stocks and bonds, and commodities include precious metals or agricultural goods. A financial instrument is a tradable asset of any kind; either cash, evidence of an ownership interest in an entity, or a contractual right to receive or deliver cash or another financial instrument. Eurocurrency Any currency banked outside of its country of origin. Eurocurrency market A money market for currencies held in the form of deposits in countries other than that where the currency is issued.