Legal Definitions - valuta

Valuta refers to the value or worth of something, most commonly used to describe the value of one country's currency when compared to another country's currency. It essentially represents the exchange rate or purchasing power of a currency in an international context.

Here are some examples to illustrate this concept:

• Imagine a technology company in the United States that needs to purchase specialized components from a supplier in South Korea. The final cost for the U.S. company will depend heavily on the valuta of the U.S. dollar against the South Korean won. If the won's valuta strengthens relative to the dollar, the components become more expensive for the American buyer, even if the price in won remains constant. This demonstrates how the comparative value of two currencies directly impacts international business transactions.

• Consider a family from Mexico planning a holiday trip to Europe. Before their trip, they would check the valuta of the Mexican peso against the Euro. A favorable valuta for the peso means their money will go further, allowing them to purchase more goods and services in Europe. Conversely, if the peso's valuta is weak, their spending power abroad will be diminished. This highlights how valuta affects the purchasing power for individuals traveling internationally.

• An investor in Canada might decide to buy bonds issued by the Japanese government. While the interest rate on the bonds is important, the investor must also consider the future valuta of the Canadian dollar (CAD) against the Japanese yen (JPY). If the yen significantly weakens against the CAD by the time the bonds mature and the investor converts their earnings back to Canadian dollars, the overall return on their investment could be lower than anticipated, even if the bonds paid a good interest rate in yen. This illustrates how currency valuta can impact the real returns on international investments.