In February 2025, exchange rates were shaped by a combination of political developments, foreign investment trends, and fluctuations in commodity prices. The Russian ruble strengthened amid shifting geopolitical dynamics, while the Brazilian real and Chilean peso saw gains driven by commodity market growth. Conversely, the South Sudanese pound continued its downward trajectory, weighed down by ongoing conflict and economic instability.
Global Currencies Gaining Value Against the U.S. Dollar:
RUB – Russian Ruble
The Russian ruble appreciated significantly following a high-profile meeting between President Putin and President Trump, during which they discussed potential resolutions to the Russia-Ukraine war. The markets reacted positively to the perceived thaw in U.S.-Russia relations, boosting investor confidence in the ruble. Additionally, Russia’s export-driven economy provided further support, as companies converted foreign currency into rubles to meet end-of-month tax obligations, increasing demand for the currency.
BRL – Brazilian Real
Despite some volatility, the Brazilian real showed overall strength compared to previous months. Notably, the real recorded its 11th consecutive trading session of gains against the U.S. dollar—the longest such streak since 2005. Key drivers behind this performance included increased foreign investment and rising commodity prices, particularly in the oil sector. However, concerns remain about inflationary pressures, prompting speculation that the Brazilian government may need to reinstate a spending cap. The Central Bank of Brazil has also signaled potential interest rate hikes to manage inflation risks.
CLP – Chilean Peso
The Chilean peso benefitted from a surge in copper prices, which followed the U.S. government’s decision to exclude copper from new tariffs on industrial metals. As the world’s leading copper producer, Chile’s currency is closely tied to copper market fluctuations. This policy shift has reinforced confidence in the peso, supporting its recent appreciation.
Global Currencies Losing Value Against the U.S. Dollar:
SSP – South Sudanese Pound
The South Sudanese pound continued to weaken, reflecting persistent economic and political challenges. Factors such as a disputed oil pipeline, internal conflict, and the ongoing war in neighboring Sudan have exacerbated depreciation pressures. However, there is cautious optimism as South Sudan’s oil production, which had been halted for nearly a year due to the Sudan conflict, is now resuming. The full impact of this development on the broader economy remains uncertain, with perspectives ranging from hope for stabilization to skepticism about long-term recovery.
Exchange Rate Changes:
Every month we provide updates on currency change of over 5% via our blog AIRSHARE. For additional insights on inflation and exchange rate fluctuations, check out our quarterly online report Data Points. We include selected 3-month Exchange Rate fluctuations of more than 5%.
What is the Cost of Living Allowance (COLA)
The Cost of Living Allowance (COLA) — also known as Goods and Services Differential, Commodities and Services Allowance, or Cost of Living Index – is a critical element of international assignee pay. It is the allowance you provide and update over time to protect assignees against excess goods and services costs in a host location. AIRINC’s approach to COLA is holistic, we believe high quality data and support go hand in hand. We provide COLA based on robust methods, calculated by our in-house research team. You also receive access to dedicated experts who proactively and promptly support your COLA needs.
Your COLA Options
It is important to tailor your COLA to your policy goals. We make it easy for you to select your desired subsidy level and ensure the allowance is aligned to your guidelines. Available for over 150 home countries and over 1000 host cities, the COLA can be configured to a set of pre-selected criteria.
How we calculate COLA
Our goal: To capture the reality of assignees’ spending needs, accurately measuring cost differences between the host and home locations. We believe our approach is closely aligned to the way assignees actually consume goods and services, delivering you a more accurate and defensible result. AIRINC is unique in that we measure cost differences arising from both price differences as well as the shopping adaptations assignees make. Our in-house researchers canvass thousands of prices on a continuous basis to capture the pure price differences in a large market basket of goods and services.
They also research circumstances in each host location, adjusting their calculations when local conditions require assignees to adapt. Examples of adaptations include considerations for local commuting patterns (e.g. driving in Houston vs. using public transportation in Singapore), accessing child-care (babysitters in lieu of family support), and drinking water (using purified water when tap water is not advised). Capturing price differences in this way provides you with a COLA that reflects your assignee’s actual experience, giving you the comfort that your employees are supported properly.
