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Another fall of the dollar against the ruble: holders of cash bucks – worries are in vain!

Another fall of the dollar against the ruble: holders of cash bucks – worries are in vain!

The Moscow Exchange stops trading due to sanctions, and all residents "discount" the currency, since all correspondent accounts of the NCC (The National Clearing Center - the counterparty with whom it works and thanks to which currency trades are held on the Moscow Exchange ) will be blocked abroad.

Against this background, the "pseudo" exchange rate of the US currency has again moved into its usual trend and is flying down.  Who has foreign currency savings ($) on their accounts, namely in a non-cash form , – this is practically … oops.

And this is a really high risk of their loss or, at best, exchange at a bargain rate. Therefore, if someone has them, we promptly advise to transfer to another form of asset or cash out (if of course there is still such an opportunity).

It is important to understand that if the non-cash form of money is determined by the possibility of settlements by them by conducting transactions in a digital/electronic format that relies on a system of institutional market participants (programs of banks, exchanges), then the cash form does not depend on them at all. Therefore, even if the possibility of settlements in non-cash form is closed, then you can't say that about cash.

The risk can arise only when it is physically impossible for everyone to cross the border. Well, so to speak, full lockdown (full isolation - like moved to Mars). Then you will not need any dollars, not cash, not non-cash.

Regarding the fairness of the dollar exchange rate to the ruble is already a hackneyed topic, but nevertheless.

The value of the dollar is determined not by what price is set by internal circumstances (not the market), but by the parity of goods and material values/services relative to this currency around the world.

Let's give, for simple understanding, a banal example.

Well, imagine, you have $100. How many certain goods can you buy, for example, for this amount abroad, and how many at home. At this rate, as it is now, conditionally we will be able to buy 100 units at home, and 150 abroad. Naturally, if we consider the market, then the buyer's interest will lie in the region where it is cheaper in the international equivalent, i.e. in the dollar.

The bottom line is that for the same dollars you will be able to buy a lot more goods abroad than at home, if they are not even used in calculations at the national level. They will never lose their relevance as long as the dominance of this currency remains in world trade. This means that it will always be possible to find an application for it.

Therefore, at such a rate as it is now, the national value system to the dollar will not correspond to world reality. Pure water price competition !

Therefore, for holders of cash bucks, worries are in vain!, even if its exchange rate to the ruble (in such conditions) drops to zero.

US Dollars : Holders of cash bucks – worries are in vain! - Something Like That!

автор - Михаленко Р.
M R. Автор - kaktotak.by Specialization: financial and economic design - modeling of business, investment projects of the real sector, analysis and evaluation of efficiency, optimization of the management decision system.

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