Foreign currency as a target for investment

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The structure of the modern world is both an intuitive, extremely clear phenomenon and some kind of complex confusing system. Take, for example, the monetary method of exchanging values. It seems to be clear that humanity needs a conditional exchange element for the distribution of goods and services between people. However, after

explanations of this kind, almost everyone immediately has questions: “Why are there not enough conditional elements of exchange for everyone?”, “Why do poverty and hunger exist in the 21st century with modern technologies for accounting and controlling financial flows?”, and many others.

The answer to all questions is one, and it lies in human greed. Money, and in the modern, global sense - currency, from ancient times to the present day, is an irresistible motivational factor that has done a lot of good and bad for humanity. They are the means of achieving the limited benefits of modern civilization for each person, forcing people daily to resort to the application of tremendous efforts in pursuit of them.

Foreign currency

In Russia, unlikethe rest of the world, there was a certain, one might even say experimental, period of time in which foreign money was a crime, and domestic banknotes lost their value as a measure of greed. Then a socialist society was being built, approaching the embodiment of communist ideas.

However, today everyone knows the result of transformations of this kind. The ruble of that period was poorly convertible; inside the country, it was also not possible to buy anything with it. And foreign currency served as a means of exchange between the great Soviet state and the countries of the bourgeois West, which in turn and in due time allowed the capitalist enemies to bring down the system of equality that had threatened them for so long. Since then, the population of the post-Soviet space has been biased towards national banknotes, and the majority use foreign currency to save their accumulated money. Thus, by selling national banknotes to commercial banks, increasing domestic demand, as a rule, for the US dollar (and other currencies), domestic money becomes cheaper.

Foreign currency transactions

Today, different exchange rates, formed as a result of the influence of a large number of different factors on a particular monetary unit, open up the opportunity not only to save money in the currency of a more reliable state, but also to earn money through various monetary manipulations. Operations of this kind take place in the foreign exchange markets, they are mainly involved in commercial and central banks. They, with the help of currency exchanges, influence the economic instruments of supply and demand of monetary units, partly determining the exchange rate.

However, it, in turn, is formed not only through foreign exchange trading, but also through the determination by the country's central bank of the amount of money supply within the state, the real national income of the state, prices and other factors.

Loan in foreign currency

Obviously, due to the great popularity among the population of dollar deposits, commercial banks give loans in foreign currency in order to earn money. And since the interest rates on foreign currency deposits earn less, then the interest on the loan will be less. However, it is worth remembering about inflation and taking such loans only for minor purchases. After all, who knows when the ruble will fall again?