Pound sterling

economic-dictionary

The pound sterling is the official currency of the United Kingdom and its overseas territories. Each unit is divided into 100 pence.

The British pound is the oldest currency in circulation. Thus, it should be noted that it is one of the most widely transacted assets in the international foreign exchange market.

Given the above, the pound sterling is part of the basket of currencies considered for the calculation of the Special Drawing Right (SDR) of the International Monetary Fund (IMF). This, along with the US dollar, the euro, the Japanese yen, and the Chinese yuan.

It should be explained that the SDR is a kind of currency created and used by the IMF to function as a reserve asset and as a unit of account. Their holders can exchange them for currencies such as the euro, dollar or other hard currencies.

Territories of influence of the pound sterling

The British pound has influence in the following jurisdictions: British Antarctic Territory, Falkland Islands, Gibraltar, Saint Helena, Ascension and Tristan de Acuña, South Georgia and the South Sandwich Islands, British Indian Ocean Territory, Isle of Man, Guernsey and Jersey .

In all these territories they have a local currency, but fixed in relation to the pound sterling.

Pound sterling banknotes and coins

Banknotes of 5, 10, 20 and 50 pounds sterling are in circulation. Regarding the metallic coins, there are 1, 2, 5, 10, 20 and 50 pence, as well as 1 and 2 pounds sterling.

It should be noted that these notes and coins are issued by the Bank of England, their symbol being the following: £.

Origin of the pound sterling

The origins of the pound sterling date back to the year 760 during the reign of King Offa of Mercia who introduced the silver coin known as the Tower pound, the use of which would have spread rapidly throughout the Anglo-Saxon kingdoms.

Throughout history, the British pound has had several periods, its value being coined first in relation to silver, then following the gold standard, the German mark, and even the US dollar and the European Union. However, currently, the British pound is not pegged to the euro.

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