what does the term non convertible currency mean 
the term non convertible currency refers to a currency that doesn t trade freely on the foreign exchange market it is also known as a blocked currency even though a non convertible currency is legal tender in one country it is virtually impossible to exchange it for another currency governments typically restrict convertibility for economic reasons including when they have low foreign currency reserves the north korean won kpw is an example of a blocked or non convertible currency the bottom linethe foreign exchange market is the most liquid and largest one in the world so it should come as no surprise that there are different nuances to this market forward exchange contracts are special contracts that trade over the counter investors can use these contracts to trade currency pairs that aren t very common these contracts can be somewhat complex which is why novice traders should do their homework before considering anything like them doing your research can help you minimize your losses and avoid investment shock 