par value

economics

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July 1, 2026

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In economics, par value, also known as principal or face value, refers to the amount of money an issuer agrees to return to bondholders at maturity. This is distinct from the interest payments, or coupon payments, that the issuer makes to the bondholder.123

The market value of a bond can fluctuate and may not always equal its par value due to changes in interest rates. If market interest rates rise above a bond's fixed coupon rate, the bond will trade at a discount to its par value. Conversely, if market interest rates fall below the bond's coupon rate, it will trade at a premium to par value. However, if a bond is held until maturity, the bondholder will receive the full principal amount, regardless of its trading price during its term.2

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international payment and exchange
Determination of exchange rates
…a standard, government-determined price, or par value. This par value may be quoted in terms of another currency; for example, the par value of the pound was £1 = $2.80 between 1949 and 1967. In 1973 many governments abandoned their par values and let their exchange rates be determined by…
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…a standard, government-determined price, or par value. This par value may be quoted in terms of another currency; for example, the par value of the pound was £1 = $2.80 between 1949 and 1967. In 1973 many governments abandoned their par values and let their exchange rates be determined by…
Read More