Page 15 - Ekonomija i Biznis_May 2016.indd

In the focus Perspective

(photo: sobranie.mk) like a good deal, the exchange rate of the
denar against the Deutsche mark/Euro is
I remember the story that a friend of mine from stable and unchanged for almost 20 years?
Israel told me once, describing what the people It was a rational logic. What would happen
did in that country in conditions of very high, to your monthly rate when indeed some-
thing happens to the exchange rate? You
galloping inflation, when prices constantly could pay the installment when it would
increased. They bought large refrigerators! So have the same foreign currency amount,
at the beginning of the month, when they received but it would imply to pay more denars? Do
salary, they were able to buy food, store it in you find it appropriate for something to
the refrigerator and at least preserve some of happen with the denar exchange rate?
its value which was quickly being lost when the
One should consider another moment
prices increase! as well. In every turbulence of the foreign
exchange market which is artificially pro-
However, these expectations do not always duced and is not caused by real economic
have to be based on reality and rational- parameters, someone ends as a winner,
ity. They may be moved by unfounded and and someone is a loser. The order of events
irresponsible speculations. Someone con- is quite simple. In periods of turbulence of
veyed something to someone else “from the foreign exchange market, the value of
secure sources”. So some media suppos- foreign currencies increases. If you want
edly start to wonder whether the intro- to buy Euros, you should pay more denars.
duction of the new banknotes of 200 and You gave the denars, now you have Euros.
2.000denars, which actually have lower In a situation when the economic founda-
denomination than the poorly used al- tions are stable, the storm will end and
ready existing banknotes of 5.000 denars, things will come down. As a result, the
are an announcement of inflation?Does price of Euros will reduce to a point where
this sound familiar? What are the poten- it was at the beginning. At that moment,
tial consequences of such ignorance of since everything is stable, you will want
even worse, deliberate speculations? They to sell the Euros because you will need
are vast. denars, however you will sell them for a
lower price than the one you bought them.
Let me ask. Have you borrowed a loan? At the end, you will end with less denars
Does it have a foreign currency clause? Did than you had at the beginning, when you
you borrow it because the interest rate for bought the Euros. Actually, the loss is even
such a loan was lower than the loan in de- bigger if the denars you bought Euros with,
nars? When you borrowed the loan, you were obtained by termination of a term de-
though that there is no problem, it seemed nar deposit, so instead of getting the stipu-
lated interest rate for a term deposit, you
got an interest that corresponds to a sight
deposit.

These are moments when everyone in
this country, the government, the opposi-
tion, the media, the citizens, should pro-
vide their contribution. Responsible behav-
ior is necessary so that you can maintain a
common sense. There are things, such as
price stability and stability of the denar ex-
change rate, which are a general good, they
have been built for years and decades. Per-
sonally, I would really hate to find myself
in a situation to buy a large refrigerator.
The one we have at home is good enough.
It does not take much space and it works.

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