Negative consequences of not promoting national currency?
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Re: Negative consequences of not promoting national currency
To a certain extent the number of one currency that can be purchased in another is arbitrary. It is often based on historic relationships or internal valuation of the currency at the time of adoption. At one point $80 would buy 1 Kuwait Dinar while $1 would buy more than 1 trillion Zimabwe dollars (these numbers are no longer true for either currency).prahkeitouj wrote:If we aren't civil servant, our salary is Dollar.
I wonder why Riel is cheaper than Baht ? Does it relate to economic? How about Vietnam , why their currency is very cheap?
The only time exchange rates matter is if you're trying to leave your country and spend money elsewhere... otherwise the only thing that matters is how much stuff do you get for X amount of local currency?
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Re: Negative consequences of not promoting national currency
The US is the world's largest oil producer and natural gas as well. That's why the price is 1/3 of what it was. The Saudis are trying to shut down the fracking, shale, and oil sands projects which can't produce oil at present prices. The US could be completely energy independent, but at $40/barrel, you've got to be a buyer. If we don't get into any more fucking stupid wars, the deficit should start drying up nicely. The UK's debt is far worse as % of GDP. The US debt is even slightly better than Germany's. Watch for the Yen to take a big fall. Japan owes 221% of GDP and have an aging population. I wouldn't want to be holding any Singapore Dollars either. Check this out: http://mashable.com/2014/11/13/compare- ... 0-nations/Jamie_Lambo wrote:i wouldnt trust the american dollar too much in the future, why do you think America is so obsessed with the oil in the middle east? because it gets traded in american dollars, if the Gulf were to end trading their oil from USD and use Gold instead, (which they have had many meetings about over the past few years) it would seriously effect the USD, the reported deadline in 2018 could see some big changes!
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Re: Negative consequences of not promoting national currency
Thanks for your explanation, but not really get the meaning.TheGrinchSR wrote:
To a certain extent the number of one currency that can be purchased in another is arbitrary. It is often based on historic relationships or internal valuation of the currency at the time of adoption. At one point $80 would buy 1 Kuwait Dinar while $1 would buy more than 1 trillion Zimabwe dollars (these numbers are no longer true for either currency).
The only time exchange rates matter is if you're trying to leave your country and spend money elsewhere... otherwise the only thing that matters is how much stuff do you get for X amount of local currency?
Btw what is X .... mean?
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Re: Negative consequences of not promoting national currency
X = any random number.
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Re: Negative consequences of not promoting national currency
Thank you.wackyjacky wrote:X = any random number.
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Re: Negative consequences of not promoting national currency
Basically, it means currencies are neither cheap nor expensive from inside a country. 4,000 Riel, is 8,000 Kip or 22,000 VND but so what? In general they buy about the same amount of goods in Cambodia, Laos and Vietnam respectively.prahkeitouj wrote:Thanks for your explanation, but not really get the meaning.TheGrinchSR wrote:
To a certain extent the number of one currency that can be purchased in another is arbitrary. It is often based on historic relationships or internal valuation of the currency at the time of adoption. At one point $80 would buy 1 Kuwait Dinar while $1 would buy more than 1 trillion Zimabwe dollars (these numbers are no longer true for either currency).
The only time exchange rates matter is if you're trying to leave your country and spend money elsewhere... otherwise the only thing that matters is how much stuff do you get for X amount of local currency?
Btw what is X .... mean?
The only time these numbers matter is when there are dramatic changes. This week the VND went from 21,000 to 22,000 to $1. That's nearly a 5% change. To the Vietnamese farmer... this is no big issue, almost everything he buys is made inside the country - it will take a long while for the change to filter through the system to his pocket. To the Vietnamese software development company, that buys a lot of imported technology this is not good news though - they are now 5% worse off than last week (they need to spend more of their money on importing stuff than they did before).
Cambodia to some extent is protected from that because most people are paid in USD and bank in USD. If the Riel goes to 4,300 to $1 - it doesn't matter. However, conversely, this week people buying Vietnamese products with dollars just got a 5% discount, in Cambodia because every major transaction is in dollars - they got no discount. So, buying from Vietnam just became a better option - if two products were the same price before the start of the week.
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Re: Negative consequences of not promoting national currency
It can be good and bad for Cambodia to use Dollar and Riel. Most of Cambodians get salary in Dollar except civil servants.TheGrinchSR wrote:
Basically, it means currencies are neither cheap nor expensive from inside a country. 4,000 Riel, is 8,000 Kip or 22,000 VND but so what? In general they buy about the same amount of goods in Cambodia, Laos and Vietnam respectively.
The only time these numbers matter is when there are dramatic changes. This week the VND went from 21,000 to 22,000 to $1. That's nearly a 5% change. To the Vietnamese farmer... this is no big issue, almost everything he buys is made inside the country - it will take a long while for the change to filter through the system to his pocket. To the Vietnamese software development company, that buys a lot of imported technology this is not good news though - they are now 5% worse off than last week (they need to spend more of their money on importing stuff than they did before).
Cambodia to some extent is protected from that because most people are paid in USD and bank in USD. If the Riel goes to 4,300 to $1 - it doesn't matter. However, conversely, this week people buying Vietnamese products with dollars just got a 5% discount, in Cambodia because every major transaction is in dollars - they got no discount. So, buying from Vietnam just became a better option - if two products were the same price before the start of the week.
If 1$= 4,100 riel, we can buy a bow of noodle( 4,000riel). But if 1$= 3,900 riel, we have to add 100 or 200 riel if we give dollar.
However, we are optional. We can have two bank accounts, Riel and Dollar. We can use anything good for us in the country.
But when we go abroad, goods and everything are different. For example,1$ we can buy few mangoes in Cambodia, but abroad we spend around 5$ to buy it.
I just wonder why 1riel # 1$ ? 1baht # 1$?
It's different 4,000 times between Riel and Dollar. We don't have 1-99 riel note and we don't use it. The smallest is 100 riel. We use to publish 50 riel note , but it didn't work. I wonder if we stop using 1-3900riel. So what happen ? ( my stupid questions).
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