Exchange rates were stable excluding a few listed below with significant movement for the month of November. The main factors affecting these rates include exports and imports and domestic policy. Domestic policy varies from country to country. These consisted of changes in interest rate and currency valuation. Pakistan’s currency moved due to a crackdown on illegal exchange locations, which is an uncommon reason for exchange rate movement.
Currencies Losing Value Against the USD
MWK – Malawian Kwacha
A combination of low forex reserves and high import costs caused the Malawian kwacha to fall. The kwacha’s value moved on the parallel market as well. The Reserve Bank of Malawi acknowledged this shift of demand at the forex auctions and the move on the parallel market, which shifted the selling price further to close the gap between official and parallel rates.
CLP – Chilean Peso
The interest rates in Chile are slowly being decreased and borrowing costs have subsequently lowered. The Central Bank has made these changes as inflation eases. Chile also cut its economic forecast for 2023 to 0% but maintained its target of 2.5% growth for 2024.
COP – Colombian Peso
The Colombian peso decreased over the past month. The trade deficit has not improved, and short-term expectations are negative as inflation continues. Last month many banks, industrialists, and President Gustavo Petro himself called for an interest rate cut. Despite this, the Central Bank decided to leave the rates unchanged.
ZWL – Zimbabwean Dollar
Increased dollarization is causing the ZWL to lose value on the foreign auction exchange. Zimbabwe is trying to promote the use of a new gold-backed digital currency called the ZiG, which became available in early October. This is the country’s attempt to prevent re-dollarization and increase use of the domestic currency. This new digital currency can be used for online payments and purchases through point-of-sale terminals. The IMF has advised against this approach and suggested that the currency should move to a more liberalized platform rather than the current auction exchange system to move towards a currency recovery.
BYN – Belarusian Ruble
The Belarusian ruble has been allowed to float freely during certain trading sessions so its value can be determined through market supply and demand. The currency quickly fell once this change occurred and commercial banks showed uncertainty through the different rates they have posted.
Currencies Gaining Value against the USD:
PKR – Pakistani Rupee
The Pakistani rupee has been gaining value, in large part due to the government’s increasing efforts to subdue illegal dollar trading activity. As part of these efforts, money exchanges have been monitored significantly, with the government carefully reviewing dollar trades and conducting raids at offices suspected of illegal activity. Millions of dollars have been confiscated because of these raids and have come back into the interbank system. Regulations for exchange companies have become increasingly strict. Many exchange companies were affected, as they have failed to meet these newly enforced terms and have been forced to shut down. Many commercial banks announced that they will establish their own exchange companies, aiming to increase transparency in dollar exchanges.
How do currency changes affect compensation?
For up-to-date figures, please reach out to your AIRINC representative or click here to reach our inquiries team now.
Subscribe to our blog to stay updated on changes around the world that impact Global Mobility, including your cost of living allowances.
