Topic: The increase of dollar affecting underdeveloped countries economy - page 2. (Read 679 times)

I don't know if someone has already share this perspective, but from a point of view of freelancers who live in underdeveloped country while working for international clients and getting paid in USD, the strengthen of USD is a bless. I don't need to worry when the basic needs in my country is skyrocketing, because I am getting more money too after I exchange the USD to my local currency, compared to other workers who work locally their payment are still the same.

Tho it doesn't make me significantly richer, the increase of USD help me in a difficult time like right now when the price of almost everything is increasing, even some of the stuff is doubled in price.

America definitely exports its own debt all around the world because USD is a global currency. When the American dollar is getting stronger, currencies of other countries is getting weaker and their country is getting poorer. Poor countries usually have debt in USD and it's getting expensive for them to pay the debt back. By the way, if it wasn't USD, it would be another currency and the situation would be the same or worse, so I don't blame USD but fact is fact.

There is definitely a beef between you and pooya, you two are like water and oil

It's easy to blame others, that's all. It's easy to tell your people and make them believe that someone else is the source of all of their problems and not the inner group of politicians. Since the average Joe is dumb and represents the majority of the country, this trick works.

Yeah, exactly, you' not starving , you're just out of food !  /s


 They are the only true influence, that's why some countries have not had their currencies lose value against the USD while some are adding a zero each month, the more idiotic and incapable the government the deeper the hole in which it dragged both the country and its citizens.


Kindergarden level logic:
If the currencies of countries that form SHITS BRICS are losing purchasing power against the dollar and are ditched by everyone, how would another currency backed by the same countries be used more? Suddenly someone who doesn't accept rubles and rupiah because they are devaluing like there is no tomorrow are suddenly going to trust the same economics genus and accept it.

Seriously?
If the guys behind onecoin and bitconnect would come together and launch a new coins, would you buy it?

Obviously, you are getting it wrong. The dollar is not increasing in value in other countries; rather, its local currency value is decreasing on the general market, and this has to do with the economic situation of the country. If anyone is in the right place to find a solution to it,. It should be the federal government that needs to take action to solve the chaos.

However, the increase in the dollar, as you said, has various impacts on each individual. Yeah, the poor get affected as well, but those who earn in dollars or have friends and family outside of the country that send good tidings in dollars will not be affected.

At first glance, this is indeed a problem, especially on a global scale, especially for countries whose debt items are paid in USD, as you mean by assuming that they are unable to face the pressure to offset the increase in dollar debt and interest.

We also must not forget that although this can be used as an excuse, internal factors also have a big influence and impact if the wrong decision is made, for example government policy, infrastructure development, the level of corruption that occurs at almost all levels of government so that it quickly weakens the country's economy to the point where underdeveloped countries so it is not easy to recover to improve people's welfare.

and what solutions must be taken by the government, namely being responsive in strengthening internal economic infrastructure, implementing monetary and fiscal policies that are more stable and pro-people and increasing investment cooperation in the fields of technology and innovation as well as in the economic field. In my opinion, there are still national children who are able to overcome this problem, they don't necessarily have to be brought in from abroad.

A rise in the value of the dollar certainly affects economically underdeveloped countries. For example, in the country where I live, the value of the dollar is very high and the value of the dollar is constantly increasing. In my country now the price of each dollar is selling at 126 BDT before our dollar price was 80 BDT 86 BDT 100 and the current price of dollar is 126 BDT not only the price of dollar has increased. The ever increasing value of the dollar has increased the price of everything in my country including the price of gold so an increase in the value of the dollar in one country will increase the price of everything in that country and has a unique side effect.  On the unique side, the value of money will depreciate and the price of goods will increase. It is not possible from my country to suppress it because the economic condition of my country is very bad. But even if we are selling at 126 BDT now, it is expected that it will become 130 plus in a few days.

In my opinion, underdeveloped countries can brace the impact of an increase in dollar value by:

• Governments can implement policies to boost domestic production and exports, making their economies less reliant on USD imports. This could involve investing in infrastructure, promoting education and skill development, and providing incentives for businesses.
• A strong USD can also make the country a more affordable tourist destination, potentially boosting tourism revenue and foreign exchange inflows.

A country's economic foundation is the true driver of its currency's value. Strong domestic policies fostering robust industries, innovation, and a healthy balance of trade are crucial. Countries exporting more than they import see their currencies strengthen as demand for them increases. Conversely, excessive reliance on imports or unsustainable economic practices weakens a currency.

It's not just about the volume of exports, but also who's using the currency. Encouraging foreign investment and diversifying trading partners beyond the dollar can significantly boost a currency's appeal. This can involve denominating exports in local currency, making it more attractive for international transactions. While printing money can stimulate short-term economic activity, it's a double-edged sword. Excessive printing often leads to inflation, eroding the value of the currency and discouraging investment. Responsible monetary policy is essential for maintaining a stable and trustworthy currency.

It's important to remember that the world is not a unipolar system with the dollar reigning supreme. Other currencies, like the euro and the yuan, also carry significant weight, and regional economic powerhouses are emerging. Viewing things solely through the lens of the dollar can hinder a comprehensive understanding of the complex dynamics at play.

Dollars did not increase in any way since it's not operating its own market; it's a US currency. The reason why the dollar affects the currency of undeveloped countries is because if a country is not able to produce what they are using, they import things for their citizens to use. You can see that the traders of those items will be paying in dollars before they can be able to import those things since dollars are used in the US and most of those things are produced in the US, so from there you will see that those undeveloped country currencies will be depreciating; they will not get any value again, and from there inflation will occur.


Not even the issue of corruption: any country that cannot produce items for themselves will face this kind of situation because their currency will not be valued in any way, so the dollar will be ahead of their local currency since they use the dollar to purchase things and sell them. Although I understand when you said they don’t allow people with skills to show themselves so they won’t take another person's position, things like this happen, but when it comes to things like this, for me, those things like skills also work since if the citizens are able to produce them, the country won’t suffer from these kinds of conditions.

When countries have signed memorandum here and there to settle trades in dollars, inflation is what the suffered from later. Undeveloped countries don't have high volume of exportation, they import most of the things the unused and because this settlement are done in US dollars, they struggle and fight other means to get dollar liquidity and this weaken their own currency because there is no demand due to low exportation. As long as this slavery OF dollarization continues, the economy will continue to suffer particularly the inflation.

Under developed and developing countries need to find ways to pay for item not only for dollar but other currency and if they want to make sure that their currency is strong, their fundamental consumption should be on their local products and not dependent on foreign goods to reduce importation and encourage exportation.

Only countries that depended on imports and exports and did not have good policies of controlling their exchange rates are affected; the effect happen when your country’s currency lose value to US Dollar, it is not that the Dollar increases in value but the country’s currency loses value which is mainly caused by inflation.

High demand and been dependent on importation is the reason behind some countries currencies to keep depreciating, if all countries will depend solely on their own products, their currency value will be intact and will not be affected yes by any country’s currency value.

Underdeveloped countries are full of corruption and nepotism, so the countries have no chance to changes. There are many great people in underdeveloped countries, but if those people doesn't have any relation of benefit for the civil servants, they won't support you or they will try to make you not able to show your potential because they're worried if you can take their sits.

There's no such thing about solution into this one on which this do really shows on what currencies are really that sitting on the top when it or against with other currencies. If the exchange rate
of dollar versus your local currency neither strengthen or weakens basing up on those known factors then it would really be giving out such effect on which this is something that would be casual.
There's no solution to that and it would really be giving out that huge effect considering that commodity and other needs would really be rising its price or value on which if you are someone
whose really that earning on average then it would really be giving out that huge effect.

For those who are earning online and earning dollars then this is something an advantage to them because they would really be able to cover up those additional cost or
add up whenever needs or cost do rise up into their country and this is the main difference in between.

What you said is true but I still blame this underdeveloped countries for such economic downtime, mainly this happens in African countries where the presidents and his appointees see public offices as a personal business that anything can be done without further questioning from the citizens, I strongly believe that many underdeveloped countries government knows what to do so that anytime dollar appreciates in the financial market they won't be affected, many countries lack production mindset and good policies, when there is production of both edible and other goods you will see that such currency will never be affected by the rise of dollar, stringent policies should be on ground in different parastatals, locally made made good should be encourage every purchase in the country should be done with the local currency, both payment in the hotels or worker in all level, import duties, with this policy such countries can stand without the wave of any currency.

Your idea of unwritten rule made me begin to think of some kind of international conspiracy. Maybe a higher government of a country conspices with the lower government of another country to continuously export and misgovern them. If so, to what extent and what purposes. It is increasing becoming real and understandable even to the dumb that the wastern countries are seriously manipulating and colonizing some underdeveloped countries to the understanding of their leaders and to the detriments of their citizens.

I think the government knows exactly what the solution is – but they don't have the option not to do it. Maybe this is what is called an unwritten rule that the government inevitably has to obey rather than relying on its own currency - but of course the main result is increased inflation and economic problems.

What we think is easy for governments to do is not what they experience. We only see the negative side of the government's performance in regulating and managing the economy – while the average will give a big zero as its performance score. Nothing is perfect when a superpower can dictate the economy of another country – the government will be considered a failure by its people.

Growing up, I used to think also that the cause of economic hardship of underdeveloped countries is as a result of the rise in the value of dollar but now, i know better. You won't really blame me for thinking this way because whenever prices of goods and services increase,  people often relate it to the increase in the price of dollar. A proper research has opened my eyes to the actual cause of the problem.

There are lots of factors that can lead to the devaluation of a country's currency. A country that has too much money in circulation will be battling with a devalued currency, this is where we can say inflation has set in. Most countries do not use their own currencies to their own advantage. Imagine a country that relies so much on importation where payments are done in Dollars, the economy will definitely suffer it. The major cause of hardship for underdeveloped countries whenever dollar rises is that they rely so much in dollar.
They borrow in dollars
Repay loans in dollars
Carryout International transactions in dollars
Even government officials use dollars for transactions
And when dollar rises, the economy crumbles  and those government officials who are making money from FX gains

The help that many of these underdeveloped countries are getting these days, have come in the form of them accepting to use the Yen or join the BRICS countries or use other currency like cryptocurrencies for purchase or and payments for goods and services even within and outside the country.
This BRICS currency is put forward as an alternative to the dollar and when these countries have fully started using it, am sure the dollar would be less used for international trade of which causes the hike in the prices locally after shipments or imports have been dropped.

Many countries have also had to increase their interest rates so as to combat the recession that follows dollar increase for these underdeveloped countries and it still does not help because the dollar is one currency that is widely used for forex and upon traveling or tourism, the dollar is most recognizable, easy to carry about and has much more value.

I totally agree with you on this. Also, I don’t think you can even say that dollar is decreasing if you aren’t comparing it with something. Dollar is like the base currency which you compare other currencies with so it has no issue. And like you said, the best way to show this is comparing that country’s currency with other big currencies.

Agree with OP, the increase in USD price can cause many negative effects on developing countries. I have a feeling that when the USD increases in value, other currencies will lose value compared to the USD. This makes imported goods more expensive, leading to increased inflation and reducing people's purchasing power. And also the debt burden, developing countries have large debt in USD. As the dollar appreciates, their debt burden also increases, leading to a higher risk of default.

And that is also part of the reason we see the polarization of the economy. With the coordination of countries around the world, developing countries can reduce the negative impact of the USD increase prices and promote economic development.