ISO 4217 in forex trading

ISO 4217 in forex trading

ISO 4217 is an international standard describing three codes to define the names of currencies established by the International Organization for Standardization (ISO).

The first two letters of the code are two letters of ISO 3166-1 alpha-2 country codes (which are similar to those used for national top-level domains on the Internet), and the third is usually the initial of the currency itself. So Japan's currency code becomes JPY - JP for Japan and Y for yen. This eliminates the problem caused by the names dollar, franc and pound being used in dozens of different countries, all with wildly different values.

The standard also defines the relationships among the major currencies and any minor currency. Often, the minor currency has a value that is 1 / 100 of the main unit, but 1 / 10 or 1 / 1000 are also common. Some currencies do not have any minor currency at all. Mauritania does not use a decimal division of units, setting a ouguiya (UM) = 5 khoums, and Madagascar has 1 ariary = 5 iraimbilanja.

ISO 4217 includes codes not only money but also codes for precious metals (gold, silver, palladium, platinum, usually measured in ounces) and certain other entities used in international finance, eg Special Drawing Rights. There are also special codes allocated for testing purposes (XTS), and to indicate no transactions (XXX). These codes all begin with the letter "X". ISO 3166 never assigns country codes beginning with "X", so ISO 4217 can use "X" codes for non-country-specific currencies without risk of collision with the future of the country codes.

Supranational currency, as the East Caribbean dollar, the CFP franc, the CFA franc BEAC and the Franc CFA BCEAO are normally also represented by codes beginning with "X". However, the euro is represented by the code EUR, although the EU is not ISO 3166-1 country code, it is used anyway, and in order to do so EU was added to the ISO 3166-1 reserved codes list to represent the European Union. The forerunner of the euro, the European Currency Unit, had the code XEU.




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