Global currency devaluation rankings for the first quarter of 2021! The risk of exporting to these countries is high!
In the first quarter of 2021, the US dollar index finally ushered in a strong recovery, with an increase of 2.8%, the best quarterly performance in a year. Among them, in March alone, the dollar index rose by 2.47%.
With the US 5 trillion "coining" bailout, the floods spread to emerging markets, causing them to bear huge inflationary pressures.
The global currency devaluation ranking list for the first quarter is as follows. When exporting to these countries, please be aware of market risks!
Imported inflation in the US dollar has made Brazil struggling in the quagmire of the epidemic worse.
Since January last year, the Brazilian real has depreciated nearly 40%. In the first quarter of this year, the Brazilian real depreciated as much as 9.8%.
Last year, Brazil’s consumer price index increased by 4.31%, especially in food and fuel. From January to November last year, food prices in Brazil increased by about 16%. According to the latest economist survey released by the Central Bank of Brazil, Brazil’s inflation rate in February exceeded 5% for the first time in four years and is expected to hit 4.6% this year.
In March, Brazil fired the "first shot" of the global central bank raising interest rates. On March 18, the Central Bank of Brazil raised the benchmark interest rate by 75BP to 2.75%. This is the first time the Central Bank of Brazil has raised interest rates since July 2015. The Monetary Policy Committee of the Brazilian Central Bank said that at its next meeting in May, interest rates will be raised again by the same amount, "unless there is a major change in inflation forecasts or risk balance."
Whether this move can support the exchange rate is still unknown.
Turkish President Recep Tayyip Erdogan even fought three central bank governors, but he couldn't save the lira that fell. The lira has closed down for eight consecutive years, and most of the annual decline has been more than 10%. At the beginning of 2021, it has not improved.
On March 22, affected by the news that the governor of Turkey's central bank was removed, the Turkish lira collapsed at the beginning of the market, almost reaching the historical low in November 2020, which was the first time since November last year that it "broken 8". In the first quarter of 2021, the depreciation rate of the lira reached 8.9%, second only to the Brazilian real.
However, Turkey's inflation rate is even more terrible than Brazil. In January 2021, the country's food prices rose by 18% year-on-year; in February, Turkey's domestic inflation rate was as high as 15.61%. For ordinary Turkish people, the biggest feeling of the depreciation of the lira is the soaring prices, especially for imported products.
A saying that Turks often say now is: "We are getting poorer and poorer."
On March 18, the Central Bank of Turkey followed Brazil and raised the benchmark interest rate by 200BP to 19% again, marking the fourth rate hike since September last year.
Turkey wants to make a big export this year. In the first quarter of this year, it won the best "first quarter export" data in history.
The official exchange rate of the Argentine peso fell by 7.7% in the first quarter, but it is almost impossible for Argentines to buy dollars from official channels. Some analysts said that in November last year, Argentina's foreign exchange reserves were exhausted, and net foreign exchange reserves were close to zero.
In September last year, Argentina tried to limit the depreciation of the peso by strictly restricting the purchase of US dollars by individuals and businesses, but it did not seem to be of much use.
In January of this year, Argentina began to implement foreign exchange controls on imported luxury goods and specific finished products. Importers of luxury goods and specific finished products must be taxed 365 days (luxury goods) and 90 days (specific finished products) after the above-mentioned goods are released. Only then can you enter the foreign exchange market to purchase the official exchange rate U.S. dollar to pay for the goods, that is, if the importer needs to pay his supplier in advance, he must first raise the U.S. dollar. Affected luxury goods and specific finished products include: high-end motor vehicles, private jets of more than US$1 million, leisure yachts, alcohol products of more than US$50 per liter (such as champagne, whiskey, spirits, etc.), caviar, pearls, diamonds As well as other gems, it also includes a number of commonly used or household commodities such as mineral water, washing machines, dishwashers, planters and comprehensive harvesters.
On the other hand, Argentina began to experience soaring prices last year. Since the second half of last year, the average price of Argentine fruit has increased by 228%, the price of potatoes has increased by 114%, and the average price of meat has increased by 103%. The inflation rate for January-February 2021 will both reach 8%.
At present, the proportion of poor people in Argentina has risen to 42%, the highest increase in Latin America.
At present, the U.S. dollar has rushed to a one-year high against the yen. In the first quarter of this year, the yen exchange rate fell 7.2%. The widening of the spread between the US and Japan is the dominant factor in the depreciation of the yen at this stage. Given that US bond yields still have room to rise, the outlook for the yen is relatively bleak.
In the first quarter of this year, the Korean won exchange rate fell 4.1%.
South Korea has also suffered a surge in prices, especially food prices. In January this year, food prices in South Korea rose 6.5% year-on-year compared to the previous year, ranking fourth among OECD member countries, more than twice the average increase. Korean food prices rose even more in February (9.7%) this year, setting a new high since August 2011 (11.2%).
According to data on consumer price trends released by the Korea Statistics Agency on April 2, Korea’s Consumer Price Index (CPI) rose 1.5% year-on-year to 107.16 in March, the highest increase since January last year.
Now, the price of a bunch of green onions in South Korea is as high as 50 yuan (9,000 won), 3.5 times that of the same period last year.
In the first quarter, the Thai baht became the worst-performing currency in Southeast Asia, with a depreciation rate of 4.1%, reaching its lowest point in six months, with a cumulative decline of about 3% in March.
The analysis believes that the depreciation of the Thai baht is largely due to the economic recession caused by the new crown epidemic, which has severely impacted the Thai economy, which is highly dependent on tourism.
But for Thai exporters and companies, the depreciation of the Thai baht will be appreciated.
While the U.S. dollar index rose strongly, the Malaysian ringgit depreciated sharply in early March, falling below the important 4.10 mark in one fell swoop, depreciating by about 3% in the first quarter.
According to IMF statistics, as of September 2020, the US dollar accounted for 60.5% of foreign exchange reserves, the euro accounted for 20.5%, and the highest among other currencies was the Japanese yen, accounting for only 5.9%; according to SWIFT statistics, as of February 2021 , The U.S. dollar's share of global payments is 38.4%, which is still the world's number one.
Former U.S. Treasury Secretary John Connery’s words are really in place-"The U.S. dollar is our currency, but it is your problem."
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