In my country, the local currency is tied to USD and the central bank has enough reserves to support it, so we do not have an inflationary effect, but I have seen examples in some neighboring countries of bad dependence on USD, most of which are for those countries that import a lot of products with a clear trade deficit, which raises the prices of goods and basic materials. It is weakened because the strength of the dollar means that raw products will be exported abroad, which means an increase in prices, and that the imported materials that the market depends on will be at a high price, which will lead to an increase in prices.
The middle and poor classes are affected by this type of inflation compared to the upper middle and rich classes.
Topic: The increase of dollar affecting underdeveloped countries economy - page 4. (Read 679 times)
February 23, 2024, 03:06:27 AM
February 23, 2024, 02:45:30 AM
Blaming USD because it's better than other currency is like blaming the rich because you're poor, it's not make sense.
If you don't like your local currency because the inflation rate is higher than USD, you can save your money in USD, even better you can invest your money to stock, gold, Bitcoin that can hedge against inflation.
If you're poor, you need to work very hard and if you have a chance, you need to work overseas in first world country, that's the fastest way to change your life.
If you don't like your local currency because the inflation rate is higher than USD, you can save your money in USD, even better you can invest your money to stock, gold, Bitcoin that can hedge against inflation.
If you're poor, you need to work very hard and if you have a chance, you need to work overseas in first world country, that's the fastest way to change your life.
February 23, 2024, 02:22:51 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.
this is basically coming from a place of lack of proper knowledge on the reality that the dollar isn't increasing with respect to other currencies. What happens is that the value of other currency reduces it value because of the economic strength of those developing countries.In the first place, if those developing nations had put in place measures that ensures that they are depending more on locally manufactured goods, then these devaluation of thier currency wouldn't become a thing of serious concern to them. But because they all depend on product from countries that uses the USD, we have situation like this that it almost seems as though thier economic strength depends on the value of thier local currencies to the dollar.
February 23, 2024, 01:31:14 AM
Well, the US Dollar gave some stability to international trades.You need a stable currency for global trade and also trust in that system that it will be safe and also widely accepted.
BRICS are throwing a spanner into the global market by trying to replace the US Dollar with something else, but it is still too early to see if that is going to succeed.
BRICS are throwing a spanner into the global market by trying to replace the US Dollar with something else, but it is still too early to see if that is going to succeed.
February 22, 2024, 11:30:03 PM
global economy is more complicated than many people think I guess, there's certain country that purposely trying to make their own currency cheap maybe to increase global trades or something like that its overall not a subject that can be understand within night there are certainly many things involved but I think many countries of weaker economy strength getting their currency value depreciating when dollar appreciate probably due to the fact that people moving their money from the foreign exchange market of a smaller economy country to USD just to keep their wealth from plummeting but i may be wrong.
overall it has been like this since many decades ago country with weak economy strength will always get the shorter end of the stick that's just how it works.
that's why if you live in a smaller country with their own currency keeping wealth at USD is one thing because it can avoid you from the unnecessary problems that only
further complicates you dealing with your own money.
overall it has been like this since many decades ago country with weak economy strength will always get the shorter end of the stick that's just how it works.
that's why if you live in a smaller country with their own currency keeping wealth at USD is one thing because it can avoid you from the unnecessary problems that only
further complicates you dealing with your own money.
February 22, 2024, 11:01:46 PM
It actually depends. A weak currency doesn't necessarily mean the country won't anymore engage in global trades. As a matter of fact, a weak currency could actually be designed on purpose. It could actually be intended by way of a policy to be used as a strategy in order to increase trades, exports in particular. In which case, since the currency is weak, exports are cheaper, making them more attractive for buyers compared to their competitors. Of course, there's also a need to balance since a weak currency would also mean imports are expensive.
February 22, 2024, 10:53:04 PM
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.
High interest rates make it difficult to provide liquidity for investment in these countries, which reduces the level of desired investment and increases the costs for all new investments, including those vital investments that the government needs for development.
If you have time, this is a good article to explain these effects https://www.brookings.edu/articles/how-have-fed-interest-rate-hikes-affected-other-national-economies/
High interest rates make it difficult to provide liquidity for investment in these countries, which reduces the level of desired investment and increases the costs for all new investments, including those vital investments that the government needs for development.
If you have time, this is a good article to explain these effects https://www.brookings.edu/articles/how-have-fed-interest-rate-hikes-affected-other-national-economies/
February 22, 2024, 09:21:27 PM
I think you are trying to attribute the dollar effect as punishment for bad economies, maybe...! that they are intended that way by their politicians, in any case its effect is not causal, it is a consequence of Bad regional economies.
On the other hand, there are influence also at developed countries.
(The adjective increase is perhaps not very suitable for your idea)
On the other hand, there are influence also at developed countries.
(The adjective increase is perhaps not very suitable for your idea)
February 22, 2024, 07:49:16 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.
When underdeveloped countries heavily depend on importation, when there is bad economic policy in the country, it makes the value of their local currency loose value against the dollars, the importers spend more money on importation and clearance of their goods, and because of the more money spent on importation, they increase the price of goods and commodities and that tightens the economy for the low income earners and others just struggling to survive. 
February 22, 2024, 07:07:55 PM
The dollar does not directly control the appreciation not depreciation of other countries currency. Their economic policies as well as the rate at which good and services produced that could be exported to other countries. That could in turn, determine the strength of their currency against the dollar.
The over reliance on the dollar by these countries also help put them more into the mess they’re already facing. It’s not nearly a global issue as you think it is as this isn’t a new issue.
Work on your economy, have a favorable balance of trade and put in place policies to attract new and favorable investment opportunities. Then watch your economy and currency grow.
The over reliance on the dollar by these countries also help put them more into the mess they’re already facing. It’s not nearly a global issue as you think it is as this isn’t a new issue.
Work on your economy, have a favorable balance of trade and put in place policies to attract new and favorable investment opportunities. Then watch your economy and currency grow.
If you look at this countries having their local currency devaluing every time against the dollar you will notice something similar and that’s the issue of attracting more users of their own currencies by even other countries. This is achievable only if the country exports more of their goods than importing. This exportation should be adviced in local currency to make the local currency gain more popularity and attract investors too to have the local currency of the That exporting country which actually strengthen the local currency and economy.
The other reason of why the local currency of some countries are devaluing against dollar or other currencies is the fact the excessive printing of paper money gives room for bearish sentiment of that currency because the demand value is always in a scarce currency
February 22, 2024, 06:01:18 PM
The dollar does not directly control the appreciation not depreciation of other countries currency. Their economic policies as well as the rate at which good and services produced that could be exported to other countries. That could in turn, determine the strength of their currency against the dollar.
The over reliance on the dollar by these countries also help put them more into the mess they’re already facing. It’s not nearly a global issue as you think it is as this isn’t a new issue.
Work on your economy, have a favorable balance of trade and put in place policies to attract new and favorable investment opportunities. Then watch your economy and currency grow.
The over reliance on the dollar by these countries also help put them more into the mess they’re already facing. It’s not nearly a global issue as you think it is as this isn’t a new issue.
Work on your economy, have a favorable balance of trade and put in place policies to attract new and favorable investment opportunities. Then watch your economy and currency grow.
February 22, 2024, 04:36:57 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.
This relationship has always been present, people in unstable countries have historically and are likely to continue relying on the US dollar in the near term. Firstly because it is in America's interests to keep this relationship going, as they benefit from being the "reserve currency of the world" in many different ways, but one of the major benefits is being able to loosely influence financial compliance. America also gains a lot because they're able to control the printing press to their advantage compared to most countries. That being said, people have flocked to this currency because it at least so far has always been good on it's debt obligations and the government - even though it may not seem like it at certain times - has always been relatively stable in comparison to some other places, like China for example.
February 22, 2024, 03:21:26 PM
Edited out
Nothing is wrong with the dollar increase and besides we have other currencies that are higher than the dollar both fiat and digital currencies e.g, 1 BTC = $51k+ so should we now say that the increase in the value of bitcoin is causing under development in the united states? The answer is NO
Why because the US economy is stabilizingd and has the internal capacity to control its economic demands and also working to manage the global economic meltdown, same as developing and underdeveloped countries around the globe.
Global inflation is high and this is telling highly negatively on the economy of most countries around the world ss its impact is more felt in highly corrupt developing and underdeveloped countries whose currencies are weak and whose internal GDP is in the negative.
February 22, 2024, 03:14:10 PM
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.
February 22, 2024, 03:07:10 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.
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