Author: Tim Lucas

Cancellation of Currencies Around The World

Cancellation of Currencies Around The World The past century has seen several money-laundering operations in countries such as Russia, Pakistan, Zimbabwe, Australia and several other countries. India is the last country to undertake this process in November 2016. India issued a decision to withdraw 500 and 1,000 rupees, which account for more than 70% of the money traded in India

Some countries, such as India, Zimbabwe and some African countries, have recently canceled the treatment of some of their notes and withdraw them completely from the economy. India recently decided to stop dealing with some securities, which The Bitcoin Code Login account for more than 70% of the paper money market in India. To large protests and opposition from citizens and parties as a result of the sudden decision. According to the Indian government, the reason for this decision is to try to fight corruption and illegal enrichment. But this event, which created reactions beyond India’s borders, creates a debate among political and economic elites about the feasibility and effectiveness of the process, which makes the money of many citizens worthless.

Currencies

Currencies

What is the process of canceling money?

Through the demonetization process, governments cancel the nominal value of a banknote or currency (which may also include cancellation of postage stamps), which are dealt with and traded within the country’s borders and issued by the authorities and carry nominal value. This cancellation may also include the country’s official currency (Such as the euro area) because of the central authority’s desire to introduce new currency or change its currency, which means the abolition of the legality of dealing in the currency or old banknote, which entails the replacement of old citizens’ cash against new currencies to be introduced by local authorities To deal with them. When issuing a decision to cancel a banknote or coin, governments will inform the citizens of the decision and grant them a certain period so that they can replace old money with new money. In general, the money is replaced by commercial banks.

Reasons for canceling money

Government authorities cancel a currency or banknote due to various economic reasons, such as inflation control, or as a result of governments trying to reduce corruption, illegal wealth, and unregulated economy, as well as trying to prevent and track the financing of terrorist organizations. For example, 15 countries in 2002 agreed to form what is now the European Union. They have signed several economic and political agreements to facilitate trade, facilitate the movement of citizens, capital and exchange of goods among the countries formed for the Union, Which resulted in the abolition of the official currencies of these countries and their replacement in the euro currency, which is currently the official currency in the countries that form the European Union. Zimbabwe also abolished the country’s official currency in 2015 as a result of the high inflation rate, which led to the collapse of the value of the currency so that the value of the dollar at a certain stage to 2,621,984,228 Zimbabwe dollars! The authorities have therefore abolished the country’s official currency and replaced it with the US dollar and the currencies of some neighboring countries such as the South African Rand, in an effort to curb inflation, halt currency collapse and lose confidence in the local economy.

The process of canceling money in India

The past century has seen several money-laundering operations in countries such as Russia, Pakistan, Zimbabwe, Australia and several other countries. India is the last country to undertake this process in November 2016. India issued a decision to withdraw 500 and 1,000 rupees of banknotes, which account for more than 70% of the money traded in India, which has sparked international controversy among supporters of the Indian government And those who reject the process as a result of the damage of many citizens and fears of negative effects on the economy and the lives of citizens. The Indian government has justified its decision to cancel these notes by trying to combat tax evasion and the unregulated economy so that those who replace large volumes will have to make their money source and how to obtain it, as well as fighting corruption, illegal gain and illegal trade. According to Indian Prime Minister Narendra, India is also seeking to prevent money from reaching terrorist organizations, arms smuggling and human trafficking gangs. According to Moody, the Indian government is seeking to reduce cash flow and to deal with non-cash funds such as electronic payment cards and transactions Which facilitates the tracking of funds and the fight against tax evasion and illegal gain. Despite the Indian government’s justifications that many sides are opposed to this decision so that this process can affect the growth rate of the Indian economy where there can be a shortage of liquidity necessary to accelerate the development and the decline in household spending.

Is The Appreciation Of US Dollar Good Or Bad?

Is The Appreciation Of US Dollar Good Or Bad? The impact of the appreciation of the US dollar; The rise in the value of the US dollar means that consumers in these countries need more local currency to acquire the goods and services manufactured by US companies, which means the weakness of their competitiveness in front of competing companies dealing in currencies of low value, which would hurt the sales of these companies and thus the decline in profitability.

Foreign exchange markets have experienced many changes and fluctuations in recent years as a result of the change in global economic data, especially after the financial crisis witnessed in the world in 2008, which some countries still fall under their influence.

Recent years have seen the dominance of the US dollar as compared to the major currencies in the currency market, such as the British Pound, the Euro and the Japanese Yen.

One US Dollar

One US Dollar


Since 2012 alone, the US dollar has appreciated more than 30% against major currencies.
The reasons for the strength of the US dollar against the currencies of competition
The strength of the US dollar is due to the strength of the US economy and the different monetary policies of the United States and its counterparts in the global economic forces.

At a time when the US economy is seeing a significant improvement in GDP growth, EU countries continue to suffer from several economic and political problems. Growth rates in many EU countries remain close to zero in the uncertainties and uncertainties of the future. The European Union after Britain’s historic decision to withdraw from the Union and break a partnership lasted 4 decades.

Another factor that increases the strength of the US dollar is the variation in monetary policy. Since 2016, the Federal Reserve has started raising interest rates, given the positive economic data relating to the rate of growth and the decline in unemployment rates.

While the European Central Bank continues to pursue a policy of stimulus to keep rates below zero in an attempt to raise inflation and avoid a recession in the economies of European countries.

The same applies to Japan, which, although its economy is much better than that of the European Union, is still pursuing a stimulus policy to make its exports more competitive.
Pros and cons of the appreciation of the US dollar
The appreciation of the US dollar against most major currencies and currencies of emerging economies such as Brazil, India and China is a two-edged sword.

The rise in the US currency is negative for American companies that depend on exports of goods and services abroad because these goods will become higher in other countries.

The rise in the value of the US dollar means that consumers in these countries need more local currency to acquire the goods and services manufactured by US companies, which means the weakness of their competitiveness in front of competing companies dealing in currencies of low value, which would hurt the sales of these companies and thus the decline in profitability.

Which makes Bitcoin Code investors avoid investing in the shares of these companies and the search for other investment solutions.

On the other hand, companies operating within the United States that depend on the import of products and services will benefit from their activities from abroad.

So that the appreciation of the dollar in the foreign exchange market means that the ability of these companies to buy goods and services from other countries will increase, so that these materials will become cheaper, which means reducing the total cost and increase the margin of profitability for these companies.

The same applies to consumers within the United States of America so that the value of products imported from abroad will become cheaper.

Investors in equity markets will therefore direct their investments to non-export-oriented firms and look for companies that rely on the US domestic market and will not be affected by the greenback’s appreciation and most other currencies.