Depreciation of the Dollar
Good news for importers and store owners, bad news for exporters. Governments cannot afford to ignore this problem.
Thursday, August 19, 2010
The causes of the appreciation in the value of Latin American currencies relative to the United States dollar are varied. The main reason is the current weakness of the US economy and the low expectations of a quick recovery. In addition, Central and South American economies are doing well, boosted by high commodity prices and the way their financial systems withstood the last crisis.
U.S. currency rose last week after having been at its lowest value for the last five years.
The loss of competitiveness in exports and tourism generates unemployment, but intervening in the exchange rate will generate inflation.
Investors are focusing on local currency due to its renewed value and the issuance of bonds at higher interest rates.
The Costa Rican colón may have appreciated in value, but the nation's exports remain competitive, says the IMF.
- Daily Update
- Government Purchases
- Classified Ads
- Indexes & Statistics
- Press Releases
- Events Calendar