Argentina’s peso has now fallen a staggering 108% against the dollar so far this year.

Andrei Grigorov
Aug 31, 2018 · 2 min read

Not even a record of this year. Look at the below performance of some other emerging market currencies vs USD since the beginning of 2018 (on midday CEST 31.08.18):

Venezuelan Bolivar: -2,5 mln%;

Sudanese Pound: -157%;

Tutkish Lira: -73%;

Angolan kwanza: -67%;

Brazilian Real: -25%;

S. African Rand: -19%;

Russian Ruble: -18%;

Nigerian Naira: -18%;

Pakistani Rupee: -11%

And most of them are at or near record lows.

These currencies have been struggling with rising US interest rates since the start of the year due to deficits in their fiscal and current account balances (they are obliged to make imports mainly in USD). Some of them have been adversely impacted by US sanctons. With heightened trade tensions threatening to erupt into a full-blown trade war, emerging market currencies are on alert for disorderly capital outflows that could lead to financial instability, especially in countries that have high external debt levels.

Higher crude oil prices (Iran sanctions) will exacerbate the falls for non-producers.

And then Uncle Sam will come again in the form of IMF “to help” the nations with skyrocketing inflation — with more toxic medecine like budget tightenning, fiscal discipline — read: increasing prices of essential goods, less funds for public services and the like.

Ok, some are beginning to sell their crude oil and other commodities to China in yuans. But are you really willing to get dependent on another Uncle — Mao, which moves its currency at will, openly?

Only Fintech cross-border payments, enabled notably by blockchain are the solutions. They are already permitting (so far mainly but to mlns of individuals) to pay in their national currency, and to receivers — to get the money in their respective national currency.

Emerging market counrties must understand this ASAP and develop, encourage such Fintechs.

Cerealia

To improve agri-business so profoundly, traders won't go back to the old ways

Andrei Grigorov

Written by

Grain Trader and Blockchain Entrepreneur.

Cerealia

Cerealia

To improve agri-business so profoundly, traders won't go back to the old ways

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