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

December 4, 2023 (see December 20 update below). Next update: January 2, 2024. Visit Search to look at past issues of World Currency Observer (brochure edition).

The Canada dollar reversed most of its (2.5%) October 2023 fall in November 2023, moving up by 2%; the Mexico peso was up by nearly 4% in November against the US$. The Costa Rica colón US$ value is up by 11% since this time last year. The Chile peso was up by more than 4% against the US$ in November 2023, and the Brazil peso was up by nearly 2.5%, and is up by nearly 5.5% since this time last year against the US$. The Sweden krona was up by 6.5% against the US$ in November (up by 3.5% against the Euro). The Euro was up by a little more than 3% against the US$ in November, and up by 5.5% since this time last year. The United Kingdom pound was up by 4% against the US$ in November 2023. After falling by 7.5% against the US$ in September, the Poland zloty rose by 4.3% in October 2023, and is up by more thn 7% against the US$ since this time last year. The Turkey lira fell by 2.5% against the US$ in November 2023 – the Turkey central raised its key policy rate (1 week repo) by 5% on November 23/2023, to 40%, and it is now up by 31.5% (from 8.5%) in the last six months. The currencies of virtually all former USSR countries moved up sharply in November 2023 against the US$, including the Belarus rouble (up 3% in November 2023, although down 28% since this time last year) and the Russia rouble - up nearly 5% in November 2023, and down by 45% since this time last year. The 8.5% rise of the Israel shekel In November 2023 reverses all of its October 2023 fall against the US$ - the shekel is down by 7% against the US$ since this time last year. The Egypt pound is down by more than 25% from its value this time last year. The Ghana cedi is down by more than 2.75% In October 2023, and is up by 15% against the US$ since this time last year. The Malawi kwacha was devalued sharply against the US$ in November 2023, and is down by nearly 65% from this time last year (see below). The Zambia kwacha was down by 8% against the US$ in November, and is down by 40% since this time last year. Asian currencies were generally stronger against the US$ in November. Among these, the South Korea won was up by 4.5% (up by 2% since this time last year). The Afghanistan afghani was up by nearly 9% against the US$ in November 2023, and up by 22% since this time last year. The Pakistan rupee was down by nearly 2% against the US$ in November, and down by 27% since this time last year. The Thailand baht was up by nearly 2.5% in November against the US$. The Myanmar kyat was down by 40% in November 2023 (more on the kyat in the WCO December 20 update). Among the agricultural prices showing substantial gains in November 2023 were cocoa and coffee. Oil prices were down by nearly 5% (the OPEC plans for reaction are unclear). Silver prices were up by 10% in November - gold and silver prices are both up by around 13% from this time last year.

The 40% devaluation in the US$ value of the Malawi kwacha on November 8, 2023, to a central bank indication (updated by a November 28 central bank auction) of 1700 kwachas/1$US (at this moment, however, market indications suggest the kwacha is at around 1900/1$US), is widely viewed as overdue –the kwacha had been set at 1036 for the last two years, despite annual rates of inflation above 20% (the “headline” inflation rate is currently at around 27%). Looking at the recent history of the kwacha: when the Covid-19 pandemic got going in the first month of 2020, the Malawi kwacha (central bank indication) was at 734/1$US. It moved, gradually, to 825 in early June 2022, at which point there was a 25% devaluation, to around 1030 kwachas/1$US. In the months that followed the kwacha once again weakened gradually, reaching 1180 by early November 2023, before the just-announced 40% devaluation. At the time of the devaluation, the government also announced a 40% increase in electricity tariffs, but, in the face of protests, has announced a postponement of this increase until April 2024 - electricity generation in Malawi is almost all by hydro power, but connectivity to the grid is very low (the economy of Malawi is primarily based on agricultural production for domestic consumption). After the November devaluation of the kwacha, the IMF announced, pursuant to the terms of an ongoing Extended Credit Facility, a disbursement of US$35 million to Malawi. The root of the need to devalue the kwacha is viewed as primarily linked to monetary policy financing of budget deficits which are regarded as unsustainable. Malawi is in central Africa, with a population of 21 million, and the countries on which it borders are Mozambique (on the Indian Ocean), Tanzania, and Zambia – Malawi is situated on a large freshwater lake (Lake Malawi), and has long sought canal access to the Indian Ocean. The principal exports of Malawi include tobacco, gold, soybean and sugar.

December 20, 2023 update

In Argentina, a number of measures were announced on December 13 by the new administration (President Milei), which included immediate devaluations among the eight-or-so exchange rate “windows” of the Argentina peso in terms of the US$ (the foreign exchange rate structure also includes separate quotations for the Euro and some other currencies) – the different Argentina pesos are, in turn, applicable, by government regulations, to different specific transactions (one example: the exchange rates applicable to different streaming services). The exchange rate which is generally indicated in the financial media, the central bank official rate (whose significance includes the fact that it is also the dólar mayorista peso rate used for large wholesale types of transactions), was devalued from 360/1$US to 800, a 120% devaluation (the government also indicated that the peso will be devalued by around 2% per month for the foreseeable future, which increased the official rate from 350 to 360 earlier in December). The exchange rates applicable to credit card and tourist transactions, and which have been the most mentioned in newspaper accounts in Argentina, are the dólar tarjeta peso and the dólar turista peso, which were devalued by around 55%, to 1320 (this rate includes some taxes and surcharges). One interesting consequence of the devaluations is that the dólar blue (peso tarjeta), the “free market” peso, strengthened, moving from 1000/1$US to around 950 in the days after the December 13 announcement (the blue dólar rate is the base for the MEP dólar, used for certain international bank cards). The peso devaluations can be seen in the context of the overall thrust of the announcements, whose overall goal is quickly reduce and eliminate the budget deficit imbalances which have led to money supply expansion and inflation well above 100%, and part of this, government says, is the distortion in the peso-dollar relationship, and so part of the correction is movement to “una nueva relación peso-dólar de $800 en el Mercado Único y Libre de Cambiosa.” There were other peso-related measures indicated in the announcements relating to the structure of interest rates and the replenishment of Argentina foreign exchange reserves (and also measures to directly reduce the fiscal deficit, focused on streamlining Argentina government operations). The Argentina peso devaluations are a significant moderation of the peso-related election campaign proposals of the new government, which included elimination of the peso and transition to full use of the US dollar, and elimination of the central bank.

Myanmar restructured its permitted exchange rates on December 7, effectively moving to a floating rate. The central bank announced that it will still set a reference rate for the kyat (2100/1$US on December 7), but indicated that the floating exchange rate of 3000, quoted on the Myanmar online system, is permissible for most transactions. Myanmar is a resource-rich country, with oil and natural gas as its most important exports, and it also has rich and varied agricultural and mineral production resources –its major trading partners include China and India (both of which are neighboring countries) and Japan. The Myanmar government has been, with the exceptions of brief democratic interludes, largely military- based since 1962 (it became independent in 1948) and there is a long-running civil war (insurrections) which has varied in intensity (worse over the last two years). The population is 55 million and inflation is at around 30%.

(World Currency Observer will next be updated on January 2, 2024. 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.)