More and more countries are continuing to struggle with the value of their local currency. While China is devaluing the Yuan, the Brazil real must not get too strong, or risk hurting export otherwise. Economic volatility has never been a good thing, but things seem to get out of hand in several countries now. Time for plan Bitcoin! Brazil Real Becomes Too Valuable Too Quickly
It is rather interesting to see Japan and Brazil struggle with the same type of issue at the same time. Both countries’ currencies have appreciated a lot since early 2016, which spells disaster for exporters. The real gained 30% in value since January, which is quite a significant change in just six months. If this trend were to continue, the local export would be affected in a bad way.
Despite this appreciation of the Brazil real, the country’s economy is still in dire straits. Many years of financial interventions and commodity markets fluctuating widely have left the economy in tatters. At one time, the real was close to parity with the US dollar, but the value tumbled by 75% since 2014.
Various economic experts in Brazil feel the real will continue to appreciate over time. However, there is a trade-off between the currency’s value and facing the worst recession in a century. Some form of control will have to be implemented, albeit it remains uncertain as to what the government will do moving forward.
The world’s economy is a very strange creature, to say the least. When fiat currencies lose value, everybody panics. But when they gain in value too much, panic ensues as well. It appears as if there is no pleasing everybody unless the exchange rate of a currency is very limited and controlled by the banks.
Now that the Brazilian real is at such […]
