Devaluation - a phenomenon that always upsets ordinary people. With the depreciating ruble, the purchasing power of the population falls. Since the majority receives a salary in the national currency, every trip to the store becomes a chagrin: you can buy less on honestly earned money.
Of course, depreciation of the national currency is typical not only for Russia, many countries have passed through it. But when the dollar starts to grow and people become poor, it is a weak consolation.
The process of devaluation in different countries is especially noticeable from the 90-ies. At one time the Italian lira and the British pound experienced a serious crisis, 7 years ago, the defeat suffered the national currency of Belarus. The ruble exchange rate also decreases periodically, because if the state does not support it, the consequences will not be long in coming. I became interested in the question of why there is a devaluation, to whom it is profitable and whether it is possible to somehow secure oneself.
The devaluation of the ruble: a short digression into the history
As you know, the ruble began to become cheaper not yesterday. In relation to the dollar and the euro, it has been systematically falling since August of the year 1998. But even in tsarist Russia, the ruble was not always happy with stability. In the 30-ies of the XIX century, the state ceased to support the national currency, and it collapsed. If before the devaluation for the silver ruble 3 rubles were given 50 cents in paper, then the reform reduced its cost to 29 cents. In these years, the people had particularly hard times.
Not everything went smoothly in Soviet times. As a result of the reform conducted in 1961, the market price of the USSR currency fell from 4 rubles to 90 cents.
Today's behavior of the ruble also does not allow us to be bored. He then rises, then falls, which greatly affects our consumer ability. Unfortunately, this process can not be stopped, since the decline in the currency depends on many factors:
- Conduct of currencies of other countries.
- Relations in foreign policy.
- The appearance of foreign goods and services on the market.
- Inflation, both external and internal.
- Dependence of the ruble against the dollar and the euro.
It is difficult to find a Russian who would not be affected by inflation. Of course, if there are free funds, they are better to invest. The most reliable are investments in real estate, purchase of dollars and euros, as well as the acquisition of a crypto currency. Now let's find out what devaluation is and whether you can save your savings.
In a translation from Latin, the devaluation sounds like a "depreciation". It has several features:
- For the same amount a person can afford less.
- The national currency depreciates against the currencies of other states.
- The gold content in hard currency is falling.
To save and increase your own money, it is better to distribute them for different assets. It is best if they are long-term investments.
How there is a devaluation
Now let's see how the devaluation arises, what leads to it. When regulators devalue, they are engaged in the correction of domestic financial policies. In fact, they protect the currency of their country from other currencies, more popular in the market. As a result of this process, the course is as close as possible to the real.
Such a procedure is carried out periodically in many states. Ordinary people lose from it, and the problem of saving savings comes first. In order to minimize losses from devaluation, experienced investors invest money in stocks. If you select the right assets, you can not only protect your money from depreciation, but also increase your capital.
Strangely enough, in some cases, devaluation is beneficial. From it, raw monopolies, import-substituting enterprises, individuals whose labor is paid in foreign currency win.
The state can also benefit. When world oil prices declined, the revenues of the Russian budget fell sharply. But due to depreciation of the ruble, these losses are slightly compensated. When our currency weakens, every euro or dollar entering the country costs more. As budget spending remains in rubles, the treasury deficit is not that big.
After falling sales in the national currency and saturation of the market with foreign money, the Central Bank may decide to withdraw part of the currency from circulation. The ruble will start to fall against the dollar, and people can start to take out savings in foreign currency. This procedure is an open devaluation.
Consequences of depreciation of the national currency
If we talk about the current risks of the devaluation of the ruble, it is worth highlighting its strong dependence on the dollar. This is especially felt in recent years, when Western countries imposed sanctions against Russia. In difficult conditions, the state is compelled to pursue such a financial policy, but the people are the main blow to themselves. For him, the consequences of devaluation are sad:
- Prices are growing, due to which consumer demand is rapidly declining.
- The market receives less imported goods.
- Due to the lack of competitors, domestic products are also becoming more expensive.
- The level of labor migration is increasing.
- People lose their deposits in banks that have been made in the national currency.
A devastating blow affects Russian enterprises, which are forced to purchase raw materials abroad. The result is a strong rise in price of goods or bankruptcy of companies, which certainly does not benefit the domestic economy.
All these changes we feel on ourselves. As soon as the ruble bows in front of such global giants as the dollar and euro, the standard of living and freelancers, and office workers quickly falls. It's good if you get a fee in foreign currency. But in this case, the losses are inevitable, because it is necessary to pay for goods and services for rubles, that is, more expensive than usual.
Is it possible to reduce the dependence on the national currency
Since the state has the right to control the market, few people manage to avoid the sad consequences of devaluation. Fearing another collapse of the ruble, we are forced to decide: how much to leave in rubles, and how much to invest in the purchase of foreign money or other assets. To make the right choice, people sometimes resort to the help of financial analysts.
I have to say that you should not put all the eggs in one basket. It is best to invest money in different projects: cloud mining, buying a crypt, bank deposits or someone's proven business. If there is a recession in the economy or even another default, we will have a certain airbag.
It is not just us who are forced to make a decision about the safety of our savings. Devaluation is a common occurrence for those countries that are most dependent on the euro and the dollar: Poland, Ukraine, Romania, Greece, the Baltic states.
A particularly striking example of the devaluation, I could call the so-called Hungarian breakthrough, which happened in this Balkan country in 1946. In those difficult times, the Hungarian currency depreciated at a rate of 400% per day.
Fortunately, such cases are an exception, and it is impossible to calculate the profitability of investments during this period. But if the annual indicator of inflation does not exceed 15% a year, it is realistic to calculate what dividends will bring investments in a particular project. You choose the currency and its amount yourself.
A little bit about competitive devaluation
It is worth saying a few words and another about one kind of devaluation - competitive. About trade wars between countries, I think everyone has heard, but there are also currency wars. Sometimes, exchange pressure is the best way to influence a particular country. The only way to get rid of it can be devaluation.
To minimize the risks of currency wars, I would advise choosing trust management. If you choose a worthy company with a competent expert, it will help you choose the most effective investment tools. This will save money, but the independent study of the market will only benefit us.
How to deal with the ruble
Although the ruble does not always meet expectations, it is our national currency. Our mothers, dads, grandparents also rejoiced at its strengthening and grieved over the loss of their savings earned by hard labor. It is interesting that the ruble sharply changes its positions in those years in which there is a figure eight. Remember only the default 1998 year and a dash down in August 2008.
And yet I believe that devaluation is not a reason for panic. Just need to try to invest correctly in order to protect yourself from the vicissitudes of fate.
Even the strongest national currency sometimes loses in value. Its cost is affected by a variety of factors: the political situation in the world, economic crises in different countries, the emergence of crypts and much more.
All this greatly affects our consumer ability, but we, too, should not be idle. It is necessary to regularly monitor the situation in the market, to study return on investments in these or those assets and increase the level of their financial literacy. Of course, no one is insured against the negative consequences of devaluation, but we will try to minimize them. I sincerely wish you good luck and financial prosperity!