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IMaybe 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.
Topic: The increase of dollar affecting underdeveloped countries economy - page 3. (Read 800 times)
February 26, 2024, 05:29:00 PM
February 25, 2024, 06:14:15 PM
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
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.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
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.
February 25, 2024, 06:02:26 PM
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
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
February 25, 2024, 10:22:04 AM
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.
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.
February 25, 2024, 06:26:45 AM
It's not the dollar increasing it's the local currencies of those underdeveloped countries which is depreciating against it. The dollar is the staple currency for global trade and while it flictuates, it's nothing close to the level at which many of those currencies do.
Dollar cannot directly cause a drop in the value of other currencies. It's all down the their economic policies and amount of imports which puts the currency to use in global trades. Check those currencies against GBP or EUR and you'll notice the same depreciation.
Dollar cannot directly cause a drop in the value of other currencies. It's all down the their economic policies and amount of imports which puts the currency to use in global trades. Check those currencies against GBP or EUR and you'll notice the same depreciation.
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.
February 25, 2024, 03:33:29 AM
Actually have come to understand the fact that when ever dollar increases it may likely cause the depreciation of other currencies in underdeveloped countries. Particularly this might make this underdeveloped countries to be very poor. It can also make them not to engage in the global market of trading, because their currencies can not meet up to this increase in dollar. I think it’s really a global issue that needs to be addressed in order to help this underdeveloped countries.
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.
February 25, 2024, 03:17:02 AM
It's not the dollar increasing it's the local currencies of those underdeveloped countries which is depreciating against it. The dollar is the staple currency for global trade and while it flictuates, it's nothing close to the level at which many of those currencies do.
Dollar cannot directly cause a drop in the value of other currencies. It's all down the their economic policies and amount of imports which puts the currency to use in global trades. Check those currencies against GBP or EUR and you'll notice the same depreciation.
Absolutely. I found this an advantage if my local currency is depreciating it's value because my income online is based on the value of dollar meaning I get more of my local currency if I have to exchange my Bitcoin or USDT into my local fiat currency. Dollar cannot directly cause a drop in the value of other currencies. It's all down the their economic policies and amount of imports which puts the currency to use in global trades. Check those currencies against GBP or EUR and you'll notice the same depreciation.
The only affected in this are those who are paid from their job directly with the local fiat here in my country that continue to decrease it's value yearly.
February 25, 2024, 02:23:12 AM
Your getting it wrong bro it's not dollar increasing in value, its the other currency falling against it, its like a trade of value, so most of them do a lot of import from foreign countries and don't even have anything to export to balance it, so the trade is always against their economy cause they have to buy dollar all the time. I know some underdeveloped countries with a at least good currency value, currency crash is the fault of bad economy management by the government and most times corrupt leaders.
Its not even really to your advantage if you think of it, cause most products are imported and are bought in dollar, if the currency continues to crash price if things in the country would get higher to compensate for the increase in dollar, so even if your earning in dollar its just quite the same thign, just the amount your getting in your local currency is quite larger than it used to be but its same in value in correspondence with the dollar.
This can be both good or bad depending on the situation you are in. I live in a nation that has a fiat currency that is weaker against the dollar, and that is something that benefits me but doesn't benefit other citizens in my nation. Something simple, like a playstation 5, could be as cheap as 300-400 dollars, and that may feel like a very little amount, these days kids make that much weekly from their part-time jobs in the USA.
However, in nations where 400 dollars is the minimum wage, how can someone spend and entire months salary on it? But for people like me, who works and makes 800-900 dollars (and even 100+ dollars from signatures here) we do end up making a good amount of money compared to other people in our nation.
However, in nations where 400 dollars is the minimum wage, how can someone spend and entire months salary on it? But for people like me, who works and makes 800-900 dollars (and even 100+ dollars from signatures here) we do end up making a good amount of money compared to other people in our nation.
Its not even really to your advantage if you think of it, cause most products are imported and are bought in dollar, if the currency continues to crash price if things in the country would get higher to compensate for the increase in dollar, so even if your earning in dollar its just quite the same thign, just the amount your getting in your local currency is quite larger than it used to be but its same in value in correspondence with the dollar.
February 25, 2024, 12:51:45 AM
This can be both good or bad depending on the situation you are in. I live in a nation that has a fiat currency that is weaker against the dollar, and that is something that benefits me but doesn't benefit other citizens in my nation. Something simple, like a playstation 5, could be as cheap as 300-400 dollars, and that may feel like a very little amount, these days kids make that much weekly from their part-time jobs in the USA.
However, in nations where 400 dollars is the minimum wage, how can someone spend and entire months salary on it? But for people like me, who works and makes 800-900 dollars (and even 100+ dollars from signatures here) we do end up making a good amount of money compared to other people in our nation.
However, in nations where 400 dollars is the minimum wage, how can someone spend and entire months salary on it? But for people like me, who works and makes 800-900 dollars (and even 100+ dollars from signatures here) we do end up making a good amount of money compared to other people in our nation.
February 24, 2024, 08:28:24 PM
Developing countries that depend on imports struggle a lot when the dollar's purchasing value increases because their economy is not good, salaries don't increase according to the inflation rate and imported products become expensive.
Developing countries should focus on , ironically, developing their won economy and not care about exports, because if you're dirt poor and you have a negative trade balance no mater what other currencies do you're still goin to be in trouble.
A developing country with no service sector that relays more on imports is a recipe for disaster.
Even if the Dollar of the United States disappeared tomorrow, your currency would not recover at all, you know. It would be still exchanged against other strong Fiats, like the Canadian Dollar or the Japanese Yen, even against minerals like Gold. Instead blaming the external entities in other countries, we need to see inwards and wonder what needs to be changed in our undeveloped republics for our currencies to become stable again and avoid the unnecessary printing of banknotes and the issuing of endless debt. Playing the victim is not a good approach to solve problems...
But , but, if the dollar is gone everything will be fine!
Hunger will stop in Africa, child exploitations in Asia, inflation in South America, there will be no more wars, everyone will be rich, ...
Magically something will happen, there is a preacher from Iran that is writing around here the end of the dollar is going to bring the third coming of all the prophets combined in one!
What this hate about the dollar really is it's just envy, incompetent governments, idiotic dictators that have no solutions for their actual problem and they blame the us and the dollar for everything, a pipe broke in the city despite on paper being repaired 10 times and in reality not once despite eveyone cashing the money? It's not corruption and incompetence, it's the fault of the reptilians!
February 24, 2024, 07:39:18 PM
I think you are seeing the problem of the undervaluation of currencies around of the planet from the wrong point of view, you know. It is not only about what the federal reserve of the United States decides to do, it is also about the central bank of your country does in order to keep your local currency strong and stable enough for your people not to resort to other currencies. I am Venezuelan, so I can tell you I have got much experience when comes to devaluation and economical problems tied to the undervaluation of our currency in relation to the United States Dollar.
Even if the Dollar of the United States disappeared tomorrow, your currency would not recover at all, you know. It would be still exchanged against other strong Fiats, like the Canadian Dollar or the Japanese Yen, even against minerals like Gold. Instead blaming the external entities in other countries, we need to see inwards and wonder what needs to be changed in our undeveloped republics for our currencies to become stable again and avoid the unnecessary printing of banknotes and the issuing of endless debt. Playing the victim is not a good approach to solve problems...
Even if the Dollar of the United States disappeared tomorrow, your currency would not recover at all, you know. It would be still exchanged against other strong Fiats, like the Canadian Dollar or the Japanese Yen, even against minerals like Gold. Instead blaming the external entities in other countries, we need to see inwards and wonder what needs to be changed in our undeveloped republics for our currencies to become stable again and avoid the unnecessary printing of banknotes and the issuing of endless debt. Playing the victim is not a good approach to solve problems...
February 24, 2024, 01:15:57 PM
If the price of dollar increases, the underdeveloped countries will have many negative effects. Because when the price of the dollar increases, the value of their conventional money decreases. Due to which they cannot keep up with the world market. When the value of the dollar increases, the price of everything increases. But it becomes difficult to manage life with the currency of the underdeveloped countries in balance with that price. Even if the price of the dollar increases in the world market, the salary of the job in the underdeveloped countries does not increase. This creates poverty, crime, corruption.
February 24, 2024, 12:57:05 PM
Actually have come to understand the fact that when ever dollar increases it may likely cause the depreciation of other currencies in underdeveloped countries. Particularly this might make this underdeveloped countries to be very poor. It can also make them not to engage in the global market of trading, because their currencies can not meet up to this increase in dollar. I think it’s really a global issue that needs to be addressed in order to help this underdeveloped countries.
What does dollar increasing mean in this situation? Is it the amount of the USD being used by regular people in that country? Is it strengthening of the USD value against the local fiat (which is usually more about the weakening of local fiat than the strengthening of the USD)? The USD is normally doing fine, but as most fiat, it has an inflation rate and loses value over time. When another currency loses even more value due to higher inflation, it can be a problem and people can become poorer in that country, which is especially noticeable when going abroad but also within the country if the situation is bad enough. But that's not the dollar's negative impact. 
February 24, 2024, 04:13:02 AM
It's rather the depreciating local currencies of underdeveloped nations which causes the problem and that's why when you travel to those countries you have more buying power than the locals and I have a clear understand how it affects them and it impact every single person because trades happen in USD for export and import. For example the price of oil and gas will be increased in terms of local currency which affects the transportation cost within the country including food grains, building material and everything as these stuffs has to be transported across the country, also the same goes for international airlines the cost of tickets will be increased as they are calculated in terms of USD then converted into national currency.
February 24, 2024, 03:24:02 AM
It's not the dollar increasing it's the local currencies of those underdeveloped countries which is depreciating against it. The dollar is the staple currency for global trade and while it flictuates, it's nothing close to the level at which many of those currencies do.
Dollar cannot directly cause a drop in the value of other currencies. It's all down to their economic policies and amount of imports which puts the currency to use in global trades. Check those currencies against GBP or EUR and you'll notice the same depreciation.
Developing countries that depend on imports struggle a lot when the dollar's purchasing value increases because their economy is not good, salaries don't increase according to the inflation rate and imported products become expensive.Dollar cannot directly cause a drop in the value of other currencies. It's all down to their economic policies and amount of imports which puts the currency to use in global trades. Check those currencies against GBP or EUR and you'll notice the same depreciation.
One of the things that prompted many countries to create new economic blocs and partnerships is that the US Federal Reserve, when it continued to raise interest rates, did not care about other economies around the world and was concerned with the American market, and many central banks found themselves forced to raise interest rates, which harmed many monetary policies.
Yes, that's true. America doesn't care about what happens in other countries when they increase or decrease interest rates and being the number one reserve gives them a huge advantage. Other countries suffer when America is doing well because the USD becomes stronger and developing countries, that depend on imports experience more expensive lives. When the dollar has some problems, other countries pay for it too, that's why many countries want to create new economic blocks too. February 24, 2024, 03:11:53 AM
Inflation is the biggest challenge for the economy since the appreciation of the dollar. A higher value of the dollar may bring some adjustment in the world economy countries the inflation developing countries will suffer the most. This may help boost exports in weaker economies and help curb inflation in some countries including the United States by lowering import costs. The current instability of the world's underdeveloped countries will make financial markets more vulnerable.
February 23, 2024, 10:08:02 PM
The problem is not from dollar but from the local currency, when the local currency lose value you will see that that dollar gains more value against it. The cause of this can be economy challenge as a result of inflation, when it happens like this your government needs to play a role to make it better for the currency to have value than dollar or to make it equivalent to dollar. When the price of dollar increase is a result of poor economy from your country.
it could work both way though, its either the dollar just getting stronger than ever or the local currency is getting weaker, there are certainly many factors that comes into play with this thing.but the general rule of thumb is that when local currency plummets it means people are escaping their investment from it to the stronger currency for the sake of securing their own wealth.
maybe this also the cause and main culprit why when a currency dipping it could dip further down its like domino effect trigger other currency to dip as well the foreign currency trader afraid that the same scenario plays out with their investment portfolio so they just try to seek refuge from such scenario that could potentially reduce their investment int half of it.
even worse if the economy of the country is also really weak like basically high in debt without any significant earning, the currency could instantly lose its value.
February 23, 2024, 08:51:10 PM
The US Dollar is not directly responsible for the deprecation of other currencies. However it definitely has some repercussions that will affect the global market. Most likely, products and good from the united states will be less preferred by other countries because of its high prices. Global trading might decrease.
On the other hand, united states will have a chance to save some expenses by importing more from countries with lower currency. Goods will be taken from underdeveloped countries and I guess for these underdeveloped countries, it is a good source of income but for united states they are just cutting on some budget they do not need to cut.
It might be a good thing for the us but their tourism might also take a toll. Definitely lots of people from other countries would have a harder time visiting the us. But i don’t think it will affect the entire tourism sector of the united states that badly
On the other hand, united states will have a chance to save some expenses by importing more from countries with lower currency. Goods will be taken from underdeveloped countries and I guess for these underdeveloped countries, it is a good source of income but for united states they are just cutting on some budget they do not need to cut.
It might be a good thing for the us but their tourism might also take a toll. Definitely lots of people from other countries would have a harder time visiting the us. But i don’t think it will affect the entire tourism sector of the united states that badly
February 23, 2024, 07:31:00 PM
Actually have come to understand the fact that when ever dollar increases it may likely cause the depreciation of other currencies in underdeveloped countries. Particularly this might make this underdeveloped countries to be very poor. It can also make them not to engage in the global market of trading, because their currencies can not meet up to this increase in dollar. I think it’s really a global issue that needs to be addressed in order to help this underdeveloped countries.
The value of dollar is not increasing but the inflation is low compared to other countries that you're defining poor such as underdeveloped nations where they may have been facing hyper inflation where the fluctuations are not under control for multi reasons.
Whereas government keep their reserves in gold not in their Fiat because as said it's nothing but paper.
February 23, 2024, 05:51:06 PM
The problem is not from dollar but from the local currency, when the local currency lose value you will see that that dollar gains more value against it. The cause of this can be economy challenge as a result of inflation, when it happens like this your government needs to play a role to make it better for the currency to have value than dollar or to make it equivalent to dollar. When the price of dollar increase is a result of poor economy from your country.
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