Headline for .     Since the beginning of 2018, despite the Covid-19 pandemic, currencies around the world are generally down against the United States dollar.     
World Currency Observer
World Currency Observer

Exchange Rates: one year high and low

April 3, 2023. (see April 19 update below). Next update: May 2, 2023. Visit Search to look at past issues of World Currency Observer (brochure edition).

March 2023 was another month featuring a broad range of increases in policy interest rates, which included the United States and the European Central Bank – many currencies moved up against the US dollar in March. The Iceland króna moved up by 5.5% against the US$ in March 2023, strength which was reinforced by an increase of 1% in its key interest rate late in the month - the króna is down by 6.5% from its value at this time last year. The Costa Rica colón was up by 3.6% in March against the US$, and is now up by 5% from its value before the pandemic. South America currencies were generally stronger against the US$ in March 2023, but the Suriname guilder was down by 5.5%%, and is down by 67% from its US$ value at this time last year - it is now at 33.6/1$US, and was at 7.5 before the pandemic. After a 2.5% increase in March 2023, the Euro is now at .943/1$US, up by 11.25% from its value of 1.02/1$US at the beginning of October 2022. The Tajikistan somoni fell by around 6.5% against the US$ in March, but is up by nearly 16% since this time last year. The Russia rouble fell by 3% in March against the US$, and is up nearly 8% since this time last year. Africa currencies generally were up against the US$ in March 2023 - among the exceptions was the Kenya shilling (down 4.7%) and the Seychelles rupee (down nearly 4% on the month, but up by more than 3% since this time last year). The South Sudan pound, at 847/1$US, it is now down by nearly 100 % from its 429 value at this time last year. The Japan yen rose by 2.5% in March, reversing some of its 5% fall in February, and is down by 9.5% from its value against the US$ this time last year. The China yuan is down by 8.5% from its value at this time last year against the US$. The Sri Lanka rupee rose by a net 10% over March 2023 (at the beginning of March, Sri Lanka monetary policy interest rates were raised by 1%, and the rupee was floated; an IMF $2.9 billion package for Sri Lanka was announced on March 21). The Pakistan rupee fell by 10% in March against the US$ in March 2023. Southeast Asia currencies were generally stronger against the US$ in March 2023, such as the Malaysia ringgit (up by 1.5%) and the Thailand baht (up by more than 3%). Coal prices fell sharply in March 2023, and, added to the fall in the first two months of 2023, they have been widely characterized as part of a coal price crash. Gold and silver prices were up strongly in March 2023, movement which has been linked to a flight to cash and liquidity due to widespread concern with regard to weakness in banks around the world.

 Sri Lanka rupee Sept 2022 to April 2023.png

In Guyana, oil and gas production (sold for US dollars in world markets) has been increasing rapidly, with discoveries over the last ten years increasingly coming onstream, and there have been some allegations that, despite the boom, there is shortage of foreign exchange in Guyana (the opposite of the so-called Dutch disease of the 1970s and 1980s, which referred to an oversupply of foreign exchange). This issue is linked to, but is also essentially separate from, continued allegations that Guyana’s royalty arrangements with the oil and gas companies are too generous (part of the in-country dialogue in most countries, often driven by climate change concerns). For example, one alleged source of the underlying Guyana foreign exchange shortage is said to be the structure of the production sharing arrangements with the petroleum companies which produce the oil and gas, specifically the clause which says they can keep foreign exchange revenues outside the country. The royalty arrangements which are part of the agreements also require that royalties (in US dollars) be remitted to Guyana’s Natural Resource Fund (managed by the Bank of Guyana), from which foreign exchange can be drawn down by Guyana, as authorized by the government, for specified purposes. The shortage is also blamed, by some, on hoarding of foreign exchange (i.e., non-availability) by banks which specialize in certain export sectors. Another suggestion, linked to the non-patriation of foreign exchange in the oil and gas sector, is that foreign exchange is being diverted to other countries in the Caribbean, such as Guyana’s neighbour, Trinidad and Tobago, which is also an oil and gas exporter, and with whom it also shares a British colonial past.

April 19, 2023 update

The latest data WCO has seen suggest that, for the Ukraine hryvnia valued in US dollars, the gap between the official rate (37/1$US) and the mid-April/23 free market rate, is small. Looking at the exchange rate over the last year-and-a-half: the official rate of the hryvnia had been weakening in the run-up to the February 28/22 Russia "Special Operation", was then set at 30 until the end of July/22, at which point it was set at its current value of 37. The data WCO has seen also suggest that the parallel exchange rate weakened quickly (but at nowhere near levels which would have suggested hyperinflation levels of monetary expansion) after the invasion, reaching its lowest value of 43 in September/22, but then steadily gained strength, so that, as just mentioned, the current parallel/official rate gap for the hryvnia is small. The destruction of economic activity and the loss of life linked to the invasion are, of course, highly visible. Economic offsets include the massive support for Ukraine in the form of military equipment donations, and continued access to the world economy and financial markets (which must be contrasted to the sanctions against its opponent, Russia). One recent visible piece of evidence of this support is the March 31 announcement of US$15.6 billion in additional financing from the International Monetary Fund. These types of support have, it seems, gone a long way to blunting the budgetary and balance of payments deficits which are part of all wars, and have contributed to an impression that the Ukraine economic and financial management since the invasion has been focused and orderly. More evidence of this is the absence of formal comprehensive price controls (despite an inflation rate of around 25%).

(World Currency Observer will next be updated on May 2, 2023. Visit Search to look at past issues of World Currency Observer (brochure edition). For permission-to-quote enquiries, e-mail World Currency Observer at WCO@briargreen.com.)