May 12, 2015

Inequality: The Currency Value

exchange rate



I was wondering about why foreign money can buy more in our country, while our local currency can buy less in other countries. Others would say that this is because of exchange rate. I know that is the technical reason. But, why is that so? Other foreigners would probably work less but still there money would have greater value than locals that worked more. I see that in this sense there is an inequality.

This is the main reason why locals want to work abroad. Foreign money has greater value than local money. Put it this way, you and the foreigner could have the same salary ( a 50,000 Pesos could be the same to 3,000 USD) the difference would be coming from exchange rate. I don't know how exchange rate step by step works, but I know that the price is based on the supply and demand. Yet, with all the technical reason, clearly there is imbalance on how currencies are being value. Never in my dreams, could I imagine that my Peso could be more worthy in foreign land than my own country. Yet, I would argue that time should come that each currency should be valued equally.

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