UNDERSTANDING HOW TO MANAGE MONEY - Part 9
Scarcity also causes volatility of cash within the sense that if money is scarce during a country and its very hard to urge, the currency tends to extend in value while if there's surplus production of cash during a country and it's very easy to urge , such country currency tends to depreciate in value.
Though it's not applicable to all or any countries because some advance countries knows the way to regularize their currencies. as an example , Nigeria despite the scarcity and hardship of cash , their currency Naira doesn't have value and keep depreciating a day because they do not skills to balance their economy with their currency.
Loan rate of interest also causes volatility of cash . rate of interest makes country generate more revenue and thereby increase their currency rate as borrowers pay at an higher rate. the other of that happened to the lender's country. Since they pay at an higher rate, it make a loss for his or her country and tends to depreciate the worth of their currency.
Demand and provide also causes volatility of cash . If a requirement for a currency is just too high and other people uses it tons , the worth of the currency tends to extend steadily because the country knows people haven't any choice and that they need to meet the demand of individuals . because the demand increases, the availability also increases for advanced country like united state.
United State currency, Dollar is one among the foremost popular currency within the world because it's utilized in most countries. most cryprocurrencies accepts only dollar in exchange for his or her coin.
Also the web shopping sites also uses dollar as a way of exchange when it involves international trading. It doesn't stop there, some countries also exchange their currency for dollar and keep it due to the steady increment within the value of their currency. all this are the items that triggers their currency for the regular appreciation. except for developing countries like Nigeria, because the demand increases, the availability decreases because they need limited production of their currency and therefore the more they spend, the less they produce.
How to reduce volatility of cash to avoid mismanagement of money
All demands and supplies should be met. All countries should try the maximum amount as possible to balance their demands and provide . If all demands are being supplied, there won't be volatility of cash in such country and it'll be minimal if in the least it should occur.
Countries with low production should try all means if reducing their demands for other currencies and therefore the demands coming in from other countries for his or her currencies.
Countries should try the maximum amount as possible to avoid international loans. Debts caused by loans as we all know may be a major factor of volatility of cash . Countries that hope to require loan thanks to the issues and challenges they're facing should try the maximum amount as possible to form plans before requesting for the loan. they ought to choose the entire amount they have , the cash they need in ground and therefore the actual amount they're getting to borrow, they ought to set an idea for refund, the mode of refund and therefore the estimated time to refund the loan completely.
All this could be consider well before requesting for a world loan so as to avoid volatility of cash because any slight mistake or change of plan may need changes on their currency.
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These are very realistic economic terms that countries need to follow but unfortunately some of us who come certain parts of the world have leaders who are basically interested in filling up their pockets alone and as a result of this they care less about getting the country into more debt.
Dollar has been able to maintain their stand for a long time dollar rate of devaluating is very low I guess that why people and some organization prefer payment in dollars.
Thanks a lot for sharing your experience about that. Indeed managing our money is the most important thing we should do. Otherwise we will lose it all.
Managing money is not that easy , it's a difficult process that's why only 1% of the people control world money and 99% are still getting their basic needs.