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Forex Certificates: for the foreigners to be legal
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The term Foreign Exchange Certificates or FEC is commonly known as forex certificates. It can be called a kind of currency which is often used by the government as the surrogated currency of the country. But it is applicable only in those countries that have complied to subject their national currencies to exchange controls. National currency cannot be treated as forex certificates if it is convertible. The countries like USSR, Myanmar, China, North Korea, East Germany, Ghana, Poland, Czechoslovakia and Cuba are some of the countries to have employed forex certificates in the past.
About Forex Certificates
Foreign Exchange Certificates system has been introduced because in many countries it was illegal for the foreigners to keep the currency of that country. Forex certificates could be bought from the tourists' origin country like one does for traveler's cheques. These are issued by the central banks at least at 20% above the value of the national currency of the country you are planning to visit.
In most of the cases, the exchange rate of the forex certificates is higher than the currency of the country itself. This rate is determined by the central bank of that country. The old forex certificates are bought and sold as collectibles. You can visit shopping websites like www.ebay.com and find these certificates available at a particular price. For example, an FEC of 100 Yuan UNC can be purchased for $135.
Some Trends
FEC is a very popular concept in countries like Myanmar, China and Hong Kong. Sometimes, owing to certain factors, the price of FEC crosses the value of US Dollar. In Myanmar, this happened in January 2010 when Rangoon Foreign Exchange Market marked one US Dollar was equivalent to 1,010 Kyat while existing price of FEC was Kyat 1,025. Difference of 15 units of Kyat was something unprecedented.
One of the reason speculated for this was its high demand in current market. The commodities that need extensive payments like petroleum or any other fuel, SIM cards for the cell phones or tickets of airlines have been made in FEC. FEC of Kyat is useless in foreign countries hence price of FEC had been increased so that people keep it. According to the military regime of Myanmar, there are four denominations of USD is available in FEC-1, 5, 10 and 20. It is also guaranteed that face value of both will be same. Yet, in most of the cases, value of USD remains higher than the forex certificates. Ministry of Communication, Postal and Telegraph of Myanmar have ordered to sell the products like GSM mobile SIM cards and CDMA telephones for coastal-use in FEC.
In China
Forex certificates play an important role in tourism industry. In China, there is no limit to the amount of foreign currency or exchange bills a tourist can bring into the country, provided the amount is declared. But while returning RMB or Renmibi, that is as the Chinese currency is known in China, must be converted back to its original currency. Tourist may required to show the converted amount along with proper forex certificates because a foreigner cannot take more than RMB 600 with him or her back to the country.