The Dollar Getting Scarce In Africa As British Pound Plummets....

Business
1

British Chancellor of the Exchequer Kwasi Kwarteng was fired on Friday as the government-backed off of the tax-cutting plans he championed.

The plan sent bond and currency markets reeling in recent weeks.

[ATTACH=full]472132[/ATTACH]

Why it matters: Britain’s economic problems are unique in many ways. But recent events indicate that the world economy is entering a new phase, where deficits matter more and high inflation acts as a constraint on governments.
[ul]
[li]Moreover, financial markets are unusually jumpy, making for a volatile time in sovereign bond markets.[/li][li]And the question of how independent major central banks really are — meaning how much economic pain they can or will inflict to bring inflation down before politicians take charge — is coming into question.[/li][/ul]
The backdrop: Every fall in Washington, the International Monetary Fund and World Bank hold annual gatherings of the world’s financial elite. Some years feature one country that is in an economic predicament so serious, and so messy, that it dominates hallway conversations.
[ul]
[li]Think Greece in 2010, the U.S. in 2008 or Argentina in 2002. If you are a finance minister, your basic goal is to make sure your country is not that country. The United Kingdom has failed this test spectacularly.[/li][/ul]
Kwarteng was in Washington but skipped out on Thursday’s Group of 20 finance ministers meeting. By Friday, he was back in London, his five-week run as chancellor having ended prematurely.
[ul]
[li]Prime Minister Liz Truss, herself very much in the hot seat, is being forced to back away from her signature policy of cutting taxes on the affluent after it triggered a selloff in U.K. government bonds and a steep drop in the pound.[/li][/ul]
Between the lines: The United States is in a stronger position than Britain. The U.K. is more reliant on imported energy, doesn’t provide the world’s reserve currency, and is working through the disruption of Brexit.
Yes, but: The events in Britain are a sign that the era of the free lunch is over. In the last 15 years, rich countries could enact fiscal stimulus, cut taxes, and massively replace lost income without worrying too much about inflation, or spiking interest rates.
[ul]
[li]It is becoming clear that we’re now in a world with more explicit tradeoffs. The new British government was moving forward in that old framework, and markets are forcing them to rethink.[/li][/ul]
The bottom line: The omnishambles in Britain is quite a story to watch if you’re an American student of economic policy. But just because it’s happening an ocean away doesn’t mean there are no implications on the homefront.

[SIZE=7]Ethiopia restricts banks from issuing foreign currency[/SIZE]
Saturday, October 15, 2022

Ethiopia has ordered banks to deny foreign currency to businesses importing non-priority goods, in an effort to shore up dwindling foreign reserves in one of Africa’s major economies.

[ATTACH=full]472130[/ATTACH]

The move effectively freezes the import of dozens of items such as alcohol and cars, as businesses must register with banks to obtain the foreign currency needed to bring goods into the country.
In a letter to Ethiopia’s central bank, the Ministry of Finance said it had become necessary to restrict the use of foreign currency to importing food, medicine and medical equipment, and raw materials for manufacturing.

[SIZE=6]RELATED[/SIZE]
[ul]
[li][URL=‘https://nation.africa/kenya/business/we-don-t-do-private-transactions-cbk-tells-gachagua--3970772’][SIZE=5]We don’t do private transactions, CBK tells Gachagua[/SIZE][/li]Business Oct 03
https://nation.africa/resource/image/3962386/portrait_ratio1x1/70/70/27dc5b3bd9f7ed2e2af96244e99363c7/WE/cbk.jpg[/URL]
[li][URL=‘https://nation.africa/kenya/business/cbk-boss-dealing-with-awkward-moments-under-ruto-s-reign-3980008’][SIZE=5]CBK boss dealing with awkward moments under Ruto’s reign[/SIZE][/li]Business Oct 11
https://nation.africa/resource/image/3980034/portrait_ratio1x1/70/70/c39e100c0b1c0cf2081cfc6b80d7f39e/oQ/patrick-njoroge-cbk-photo.jpg[/URL]
[/ul]
“Therefore… we are sending a list of goods that will not be allowed forex for an indefinite period of time,” said the letter posted Saturday on the Twitter account of Industry Minister Melaku Alebel Addis.
The list of some 40 products includes vehicles and motorcycles to wall clocks, umbrellas, carpets and soaps, alcohol, perfumes and cigarettes.

No recent public figures are available regarding Ethiopia’s reserves of foreign currency.
In late March, the National Bank of Ethiopia indicated reserves had fallen to $1.6 billion at the end of 2021, covering less than 2 months worth of imports, according to local newspaper the Reporter.
A largely importing country, Ethiopia is in structural shortage of foreign currency", the French Treasury said in a periodic bulletin this month.
Ethiopian authorities have also recently tightened laws on foreign currency holdings for individuals and businesses, and banned all foreign currency transactions in Ethiopia.
There was also a crackdown this month on the black market exchange of foreign currency, where the US dollar can fetch almost twice the official exchange rate amid a surge in demand.

The central bank also announced this month it had blocked nearly 400 bank accounts believed linked to illicit currency trading, and promised financial rewards to those who denounced players in the parallel market.

2

The dollar is too strong now, and even affects those in Europe.

3

Every currency is based on the dollar…ndiyo S.I. unit…kusema dollar ni strong or weak ni ujinga…it’s the other currencies that fluctuate their strength…in the umeffi system…where they bow to the empire

Anybody who tries introduce another monetary system shall be met with kaboom twaf

4

In real sense, all currencies worldwide have depreciated in value including the USD. But the USD is generally more stable than the rest due to its world reserve currency status.

5

Not true:

[ATTACH=full]472218[/ATTACH]

6

This graph shows the USD relative to other currencies not its value. A currencys value is measured by a basket of goods it can by. over the years, the amount of goods one dollar can buy has decreased. Also inflation erodes value of a currency, with the US economy facing 40 year inflation highs of over 9%.

7

The dollar’s buying power has increased over the past couple of years in most countries…

8

It hasn’t, the currencies of most countries have depreciated against the dollar, that’s how they can buy more in those respective countries. They buying power of the dollar in the USA has decreased

9

Actually the British pound controls the world.
Do your research on what the City of London is.
The dollar should be taken at face value.
The real Kings sit in the financial centres of London.