World currencies: essential characteristics and conditions of formation

Instability of modern world currencies' courses (US dollar, Euro, Japanese yen, Pound sterling), the decline in the share of these currencies in the structure of reserve assets in the world, the expansion of the monetary units' list at the IMF statistics of international reserves, the statements of some nations' leaders (Russian Federation, People's Republic of China) on pursuing internationalization of monetary functions of their countries' national currencies explain the relevance of determining the necessary conditions for enhancing the international status of the specific currencies. Based on the synthesis method, the existing approaches of domestic and foreign scientists to the issue are analyzed in the article. The method of generalization has allowed determining the terms and conditions of internationalization of the monetary functions of the individual countries' currencies. On the basis of the classification method depending on their nature, two groups of conditions were allocated: 1) economic; 2) institutional and organizational. In its turn, the composition of the economic conditions has two subgroups. The first subgroup (volume of the country's GDP and its share in world production, exports of goods and services, and the share in world exports, the volume and depth of the domestic financial market) enables the creation of large-scale and sustainable demand for the currency of a particular country. The second subgroup of economic conditions describes and ensures the stability of the currency, which has a positive effect on demand. The institutional and organizational conditions (openness of the domestic financial market, the convertibility of the domestic currency) provide an opportunity for non-residents performing various operations in the currency of that country.