Dayle in Guatemala Posted October 1, 2008 Share Posted October 1, 2008 How does this work? We live in Guatemala and use the Quetzal as our currency. Usually, the exchange rate is 7.3 or 7.4 quetzales to $1US. I was concerned because of all the economic crisis in the US what our exchange rate is now. It's 7.55 quetzales to $1US!!!:blink: It's not much, but, right now every little bit helps. How can that be? I really expected it to be so much lower. Quote Link to comment Share on other sites More sharing options...
LadyAberlin Posted October 1, 2008 Share Posted October 1, 2008 Are the quetzales losing value faster than the dollar? Quote Link to comment Share on other sites More sharing options...
Dayle in Guatemala Posted October 1, 2008 Author Share Posted October 1, 2008 I don't know. I know that the financial system down here seems to be based on the dollar--the prices reflect dollar prices kwim? But, is it so tied together that it would effect the exchange rate that way? Quote Link to comment Share on other sites More sharing options...
Citrusheights5 Posted October 1, 2008 Share Posted October 1, 2008 Well I guess depending on your perspective you are doing better... but from when I was their it is worst... I remember the exchange was over 8 quetzales for a dollar. At one point it hit 9!!!! I believe because all the world is pumping money into their economies from the world reserves... it is keeping inflation even throughout the world.. I could be wrong.. but that is my 2 cents worth.. DH keeps talking about going to retire there, since my mom goes on and on about the exchange.. and the amount people live on... I love to visit....but...... he may talk me into it yet.. Quote Link to comment Share on other sites More sharing options...
Hannah Posted October 1, 2008 Share Posted October 1, 2008 I don't know much about Guatemala, but any foreign exchange based in a free market is valued by the demand for the money. The demand comes from transaction demand (people needing it to buy goods and services in the country in which the currency is used) or speculative demand (people wanting to keep the money for a period because they think it will increase in value against their own currentcy). In times of economic downturn, people tend to want to invest less in emerging markets (such as I pressume Guatamala to be) because there is more uncertainty in those markets and rather have their money in stronger currencies (like the US$ or Euro) or in something physical with inherent value like gold or platinum (which is why the prices of these commodoties have gone up). The quetzales is probably loosing value against the dollar because speculative buyers are pulling out. The longer term value depends on what investors believe the economic prospects of Guetemala are and how much foreigners wish to invest in the country. I hope this makes sense! Quote Link to comment Share on other sites More sharing options...
jamnkats Posted October 1, 2008 Share Posted October 1, 2008 Did the dollar tank earlier - like a month ago? Here in Mexico the dollar tanked to around 9.5 pesos/dollar after holding pretty steady in the 10.5+/dollar this past year. It has climbed back up and I totally don't understand it either. How the dollar could have rebounded (and I'm glad for it as our savings is in dollars) with the economic crisis, I honestly do not understand. Quote Link to comment Share on other sites More sharing options...
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