The falling exchange rate and our vulnerable domestic currencies.
The depreciation in the exchange rate all over the world after the recent war is astonishing. Most countries are struggling to hold the previous exchange rate. And it's impacting inflation, foreign reserve, and the overall economy. In recent years, we have seen some countries unofficially using USD on top of their local currencies because they have no other option.
The big question is, where we are heading? What we will do with all our weaker currencies?
No weaker currency is good for their own economy. I can give you our example, the current economic situation of Bangladesh. We are paying more than 100 takas for $1. It's a record. Also, the euro is just 96 taka which is a record low compared to the dollar for the first time. This makes our imports more expensive. All daily goods are in high price now. Even what we grow here is affected by the exchange rate.
It's an unavoidable impact on any vulnerable currency.
I know 'taka' is one of the weaker currencies. So let's not take this as an example. But if you see the overall situation now, you can't ignore the fact that globally there's a trade deficit. Just see the example of Sri Lanka. Or maybe other countries as well. Simply because Government can no longer afford it.
And this is not just a 'war impact'. This is where we were heading for a long and only now it looks obvious.
Moreover, the countries which are running on debt are at high risk now because of the exchange rate. And this is such an unbreakable chain that it's almost impossible to pay back, do development, increase the depreciation, and at the same time head to grow more. It's way more difficult.
In this situation, we need another alternative currency. We all know how China failed to do that. So it's not happening in recent times. Only one thing can help us and that is trade. But that's a temporary thing as long as we all depend on one currency. It's about time, we will get to see some poor countries get poorer and the world economy goes insane.
I have a crazy solution but no Govt will listen to it. And that is investing in crypto. Yeah, they have limited resources and not enough money to invest. Then should promote crypto and make crypto more accessible/open for all like in business. That also come with many high risks like terrorism and unmanageable scamming.
So in conclusion, I don't know where we are heading.
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