Why does the dollar exchange rate have such an impact on life in other countries?
Lately, I've noticed that news about the US dollar constantly affects prices, salaries, and even people's moods in developing countries. Why does one country's currency have such a strong effect on other economies?
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Piter Freide
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Jonas Williams commented
The US dollar is a global reserve currency, so many countries depend on its exchange rate for loans, imports, and foreign trade. When the dollar strengthens, it becomes more difficult for emerging market currencies to maintain stability. If you want to understand the deeper reasons for this impact, I recommend reading https://trading.biz/posts/what-affects-exchange-rates-between-usd-and-emerging-market-currencies . It explains well how macroeconomics, interest rates, and global capital flows shape exchange rates.