the weakest currencies
In the first eight months of 2022, the main currencies that have depreciated against the dollar are the Sri Lankan rupee, with 43.89%; the Ghanaian cedi, with 37.78%; the Lao kip, with 26.81%; the Turkish lira at 26.78%; the Ukrainian hryvnia, with 25.69%; the Argentine peso, with 25.22%; Sudanese New Dinar at 22.74%; the Hungarian forint, with 21.34%; the Malawian kwacha, with 20.67% and the Sierra Leonean leone, with 20.65%.
“Given the possibility that interest rates continue to rise in developed countries, it becomes more attractive to send savings to those countries because they will be paying more and, initially, being developed countries, it will involve less risk. This in the face of fears of a recession. If this happens, the same trend as in recent weeks will continue and the currencies of emerging countries will depreciate significantly against the dollar,” said Janneth Quiroz, deputy director of economic analysis at Monex.
Other depreciated currencies are the Pakistani rupee, with 20.21%; the Egyptian pound, with 18.68%; the Haitian gurda, with 18.11%; Japanese yen; with 15.69%; the Polish zloty, with 15.05%; the Swedish crown, with 14.49%; the Surinamese dollar, with 13.9%; the pound sterling, with 12.56%; the Danish krone, with 12.29% and the euro, with 12.27%
The depreciation of the euro and other developed currencies is due to pressures on its interest rate differential with the United States. In addition, there is uncertainty about the behavior of its economy due to geopolitical and energy problems.
The fall of the euro against the US dollar increases import costs (as it is an important partner for the region), which aggravates the increase in energy prices and the rise in inflation. “For years, European companies yearned for a weaker euro, and now that it is present, times do not favor this idea due to the entire situation that surrounds the area with the war between Russia and Ukraine, the energy crisis, winter around the corner. corner and inflation at historical highs”, assured Eduardo Ramos, financial markets analyst at ATFX Latin America.