A cheaper dollar, a respite for Latin American economies?

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2 years ago

Hello Read Casheros, I hope you are having a great weekend. Today I would like to share some thoughts regarding the world economy, very specifically regarding the fall in the price of the dollar and how this in theory should help Latin American countries, according to what I have been seeing, reading and hearing, however, in practice it is not real at all, at least not that I manage to perceive those benefits, rather, on the contrary.

According to what I have been able to investigate, when it happens as it has happened in the last few months, that the dollar reaches low prices in relation to the exchange rate of the official Fiat currency of a certain country, production is cheaper in addition to allowing greater competition in the international market for certain products, in view of the fact that producing them has been cheaper.


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In addition to the above mentioned, there is an inverse relationship in the prices of raw materials and the dollar, if this low raw materials rise, and countries that export raw materials benefit much more, Well, I do not know how true that is.

Oil prices are quite high, for example, I currently live in Colombia, specifically in Bogota (capital city), This country is a major producer of oil, diesel, and other oils, it is also the second largest producer and exporter of coffee in the world, thermal pulses and coal, also has large gold mines, in short, I should assume that with all this, the country's income should increase considerably and be beneficial in the economy.




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But the reality I sense is that the prices of all foods have gone up. Food is very expensive, and it looks like it will continue to rise. Dad, for example, until two years ago you could buy a sack for $12, now that same sack is worth up to $45, even though it is something that is harvested right here in the country. Not to mention pasta, which has gone up in recent months by at least 20%, the same with so many other things that are essential.

So this reality, contrasted with what economic theory says, I must say is not at all coherent. Maybe I am waiting for these "benefits " to arrive very fast, and I know that macroeconomics does not always move so fast, product of the same bureaucracy, or maybe it is the price speculation of intermediaries, something happens that I do not quite understand, and that is why I wonder if really A cheaper dollar, a breath of fresh air for Latin American economies?.

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