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currency manipulation

D was once a millionaire. He spent three weeks in Paraguay, where the local currency — the guaraní — was traded at 4,000 to the dollar at the time. A couple of hundred dollars was all it took to feel immensely rich. In Ghana, where S studied in 2005, one dollar was equal to 10,000 cedis, and whenever people went to an ATM they would bring a plastic bag for the armfuls of mostly worthless bills they withdrew.

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We’ve always found money to be one of the most fascinating aspects of international travel: the designs different countries put on their currencies, the safety features they incorporate into their manufacture, the widely varying weight of coins, the way global economic trends and internal politico-economic machinations trigger inflationary spirals that devalue currencies virtually overnight.

We missed Zimbabwe’s free-fall, which led the government to issue 100-trillion notes at the end of the last decade, but D has fairly vivid recollections of the currency devaluations during the waning years of the Soviet Union. D’s great-aunt had immigrated to the United States long before the collapse of the USSR, and when D’s grandmother travelled to visit her in the mid-1980s she was allowed to exchange 200 rubles for the fantastic sum of $320 American dollars. When Gorbachev began opening up the Soviet economy to the rest of the world a few years later and reality set in, the smoke-and-mirrors value of the ruble became apparent. There were long lines at the banks as people queued up to exchange the old Soviet rubles for the new notes, which were worth a tenth as much.

D’s first trip to Europe in the summer of 2000 preceded the rollout of the euro. The currency had been introduced in non-physical form for bank transfers and business transactions the year before, but day-to-day purchases were still made using the old European currencies. Before Western Europe adopted a common currency, a traveller visiting the 17 Eurozone countries would lose more than a third of his money simply by exchanging currencies at each border. By the time D returned to study in Spain in 2002, the euro notes and coins were in full circulation, but the fledgling currency struggled against the dollar. When D arrived in September, a 100-euro withdrawal would only cost $75. By the time he left Spain in May of the following year — a few months after the start of the Second Gulf War — the two currencies had swapped places and $100 only translated to 75 euros.

At the triple border in Paraguay’s Ciudad del Este, which abuts both Brazil and Argentina, the three countries’ currencies are used interchangeably, and D once paid for a single meal using a combination of all three. However, the willingness to accept foreign money did not extend to Paraguay’s neighbors, whose currencies are much stronger. As soon as one set foot either in Foz do Iguaçu in Brazil or Puerto Iguazú on the Argentinian side, the 1000-guaraní notes became little more than a travel souvenir.

Moldova is the only country we’ve visited thus far that has two independently functioning currencies. Most of the country uses the Moldovan lei, but the disputed territory of Transnistria has its own currency — a ruble that evokes nostalgia for Soviet times. We did not see any of the Transnistrian coins, but the bani — one hundred of which comprise one leu — are as close to weightlessness as a coin can possibly get. They barely feel like money at all.

Although most items are valued in lei, many businesses will price their services in euros to avoid the devaluation that accompanies the fluctuation of the weaker Moldovan currency. For example, D paid for his rental car in euros, and left a deposit in dollars rather than in lei. Despite our relative proximity to the Eurozone, we are surrounded by countries that continue to use their own currencies, which have begun to accumulate in various drawers in our apartment. S used up all the Romanian lei she exchanged during her brief stop in Bucharest, but D brought back some hryvnas from his recent trip to Ukraine, and we still have a handful of rubles from our jaunt to Tiraspol.

3 Comments Post a comment
  1. I just love the look for foreign currency! I had the chance to go to England, and brought some home as a keepsake!

    September 14, 2013
  2. Reblogged this on Oyia Brown.

    September 15, 2013
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    June 22, 2014

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