During the August survey of Harare, our visit found the Zimbabwean economy in a state of transition. This June, after a decade of using a mix of approaches but primarily relying on the U.S. dollar for transactions, the Reserve Bank of Zimbabwe announced that a new Zimbabwean dollar (ZWL), also known as the Zimdollar, was the only acceptable form of payment.
When an expatriate’s home country currency weakens, what do you do? In my recent post, I talked about the importance of initiating an increase in their goods and services allowance because the employee’s salary portion, meant to be spent on their market basket, will no longer go as far once converted into their host currency.
Control program costs while meeting assignee needs via well-designed policies that address economic changes over time. Access the recording to learn how to:
COLA is affected by complex economic factors like exchange rate fluctuation and economic volatility, which are highly unpredictable. For a COLA to be effective, the allowance must be reviewed and updated periodically to take these factors into account.
News about extraordinary economic volatility in major emerging market countries such as Argentina, Brazil, Turkey, South Africa, and others has global mobility departments questioning whether they need to take any special measures to address the concerns of their international assignees.
The economy of Venezuela continues to be one of the most volatile in the world. On Friday, August 17, President Nicolas Maduro announced the devaluation of the Bolivar Fuerte (VEF) from about 250,000 to 6,000,000 VEF to 1 USD.
The Turkish lira has had a volatile year and an especially tumultuous past week. In July, the Central Bank of Turkey alarmed investors by keeping interest rates steady even as CPI annual inflation rose to double digits.
Critics say this is merely a superficial solution and will do nothing to combat hyperinflation. This announcement followed presidential candidate Henri Falcon’s proposal to dollarize the Venezuelan economy.
Last night, the Central Bank of Iran (CBI) announced that it was unifying the country’s official and open market rates, after an emergency meeting regarding the rapid depreciation of the open market rate that took place over the past week.
The unpredictability of fluctuating foreign exchange rates is a daily reality. For many companies, it can have a significant effect on employee compensation.