The price of the dollar is one of the economic variables that most affect personal finances of the citizen. In recent years, the increase in the exchange rate has been a constant concern for many householdsespecially those that depend on income in local currency.
To understand the impact that the change in the price of the dollar has on personal finances, it is necessary to first understand what the exchange rate is and how it works. The exchange rate is the value of one currency relative to another and is determined by the supply and demand in the currency markets.
When the price of the dollar risespeople who have income in other currencies, such as the Argentine peso, may experience a reduction in your purchasing power. For example, if a person who earns 100,000 pesos a month sees the price of the dollar rise and now needs to spend more pesos to buy the same amount of dollars, his purchasing power will be reduced.
On the other hand, if a person has debts in dollars and the price of this currency risesthe amount of debt in local currency is also affected, which It can make it difficult to pay. Similarly, if you have savings in dollarsthe increase in the price of this currency can increase the value of savingswhich can be improved.
According to financial experts, the value of the dollar has a direct impact on the prices of goods and services, since many companies import raw materials and finished products that are quoted in this currency. Therefore, an increase in the exchange rate can generate an increase in prices to the final consumer.
Another way that the price of the dollar affects personal finances is through bank loans. When the exchange rate rises, interest rates often increase, which can increase the cost of borrowing in local currency.
In conclusionthe price of the dollar is a key factor that influences the household economy and it is necessary to be informed about its behavior and its possible implications for our personal finances. Maintaining a balanced budget and diversifying investment options are strategies that can help mitigate the effects of exchange rate volatility.
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by CEDOC