Mint Parity

The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Mint Parity

 

(1) Precious metal content of coinage established by law.

(2) The ratio between various countries’ currencies, as determined by the legally established content of pure gold (or silver) in their coinage. When gold or silver monometallism prevailed, the mint parity for countries with the same monetary standard was determined by the ratio of the gold (or silver) content of their monetary units. For example, before World War I the American dollar contained 1.50463 g of pure gold, and the English pound sterling 7.322382 g; thus the mint parity of the pound to the dollar was 4.86656. For countries with different monetary systems, mint parity corresponded to market values of gold and silver.

Where fully valued coins circulated and bank notes were exchangeable for gold, mint parity was the basis of foreign exchange rates. Such rates of exchange fluctuated around mint parity as a reflection of supply and demand for the currency of a given country, within trading limits set by the gold points. When nonexchangeable bank notes began to circulate, the concept of mint parity lost virtually all importance.

The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.
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References in periodicals archive ?
But the authorities could determine, through their setting of the mint parity, which price--market or mint--would adjust.
In this connection he suggested transitory devaluation, that is, setting a temporary new mint parity to which the market price would conform, and then lowering both in easy stages to the old mint par.
Source number one was the fall in the gold premium, or money price of gold G, necessary to restore the market price of the metal to its mint parity. Source number two was a fall in the real gold price of goods R caused by the additional English demand for the fixed world supply of the metal consequent upon resumption.