Day by day increase in the value of the dollar globally is causing the deterioration of the global economic scenario.
Recently, the international journal New York Times has released a report regarding the reason for the rise of the dollar and the impact it has on the rest of the world. According to the news of the American newspaper, the dollar has strengthened, and the dollar index consisting of 6 currencies is the highest in 20 years.
Since 2002, one euro has become equal to one dollar, and if we look at the Japanese currency, the yen, it is at a 24-year low.
First reason for dollar to rise:
According to the report of the world journal, the main reason for the increase in the dollar is the increase in the interest rate by the US central bank, the Federal Reserve, because the Federal Reserve has increased the interest rate faster than the rest of the developed countries.
Another reason for dollar to rise:
The second reason for the increase in the value of the dollar in the report of the World Journal is the high energy prices, due to the high energy prices, the fears of a recession are increasing in the world and the US does not depend on imported oil and gas, its situation is different. Better than countries.
It should be noted that if there is uncertainty in the world market, dollars are bought to save capital. According to the report of the newspaper, countries that borrow US dollars for their needs, the increase in the value of the dollar and the depreciation of their own currencies, is a big problem for these countries.
Specially for countries whose national production depends on international debt, it will be most difficult for these countries to repay the interest and debt.
Examples of Argentina and Turkey:
Here Argentina and Turkey are the main examples of this, these countries have to take expensive loans at new rates, it is almost impossible for some countries especially Sri Lanka.
The New York Times reported in its report that the currencies of countries that sell food and crude oil to the world have risen despite the rise in the value of the dollar, with the Russian ruble at the top, as well as the currencies of Brazil, Angola, and Uruguay, that is why it has increased.
Will the dollar depreciate?
Europe suffering from an energy crisis, Japan not raising interest rates, due to supply concerns due to the Covid lockdown in China, and inflation will remain, which will keep the demand for the dollar. But regarding how long it will last, the newspaper says that after the amount of increase in the dollar, now there are talks about the rise of the dollar.
