• 23/06/2024 19:55

Strong dollar irritates central bank officials

The resurgent US dollar is irritating central banks and governments around the world as they are forced to take action to ease pressure on national currencies, Bloomberg writes.

Strong dollar irritates central bank officials

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The strong dollar remains due to the stability of the American economy, which refutes expectations of a Fed interest rate cut.

In 2024 The dollar strengthened against all major currencies, despite predictions of a dollar sell-off.

Countermeasures from other countries, particularly Japan, included increased warnings from the central bank about its readiness to intervene to support the yen, which had fallen to almost 34-year low.

Turkey once again raised interest rates to support the lira, China and Indonesia took steps to stabilize their currencies, while the currencies of Sweden and India are under pressure.

A similar situation occurred in 2022, when The central banks of Switzerland and Canada saw their currencies weaken amid soaring inflation, and a strong dollar hit developing economies, leading to the default of one country, Sri Lanka. Today, countries in the risk zone are countries with huge external debt, such as the Maldives and Bolivia.

But with the dollar, everything is not so simple: despite the process of de-dollarization and the predicted imminent end of the dollar, many central banks of the world are still there is no alternative to dollar dominance.

Just a few months ago, a recession in the United States seemed almost inevitable, but the country was able to benefit from a tight labor market, optimistic consumer sentiment and government subsidies for production.

minfin.com.ua

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