Exchange rates for the month of September were more stable than previous months. Few currencies moved drastically against the US dollar and the ones that did move changed due to unusual reasons. For example, among the currencies listed, the Polish zloty and the Afghan afghani changed after surprising government policies were made. Poland decided to cut their interest rate despite inflationary pressures worldwide causing its decrease in value. Afghanistan on the other hand, banned certain currencies from being used in transactions driving the afghani’s utility upwards. Lastly, other currencies this month suffered from hyper-inflation or account balances.
The Polish zloty depreciates following a surprise rate-cut made by the National Bank of Poland. This cut was made unexpectedly and triggered a sell-off. Other major currencies, including the US Dollar, are considered safer investments and increased relatively to the Polish Zloty.
Venezuela again experienced high monthly inflation this year in August, with a correspondingly steep rate of depreciation. The country has failed to decrease the incentive to use US dollars despite implementing increased taxes for foreign currency exchanges.
Zambia has not produced enough exports in comparison to imports causing the kwacha to depreciate. Increased amounts of imports, including fuel and fertilizer, have also hampered the currency due to larger demand for US dollars.
Argentina’s economic condition continues to worsen. Increased dollarization remains an issue and discussions on whether Argentina should fully dollarize their economy continue to take place. The economy is expected to officially enter a recession during the following financial quarter. The long-lasting drought affecting agricultural production is the primary cause of the loss in GDP.
There are a few reasons causing the Afghani’s increase in strength. The ban on the use of the US dollar and Pakistani rupee for local transactions has increased demand for the local currency. There are also increased restrictions on transferring US dollars outside of the country. There has been an increased interest from foreign investors given the large amount of lithium Afghanistan has available. Humanitarian aid has also added to the large amounts of currency entering the country.
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.