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Aaaj (today) 21st September 2007 (Ramadan 9, 1428)
The Mystery of the Diving Dollar
What’s really amazing is how fast the once venerated dollar has lost ground against currencies around the world. It is at its lowest level against the Euro and has hit a nine year low against the Indian Rupee. I just checked and was horrified to find a dollar was worth 39.65 Rupees. I still have $402 left from an overseas trip earlier this year. I purchased the dollars at what now looks like a princely sum of Rs. 43.05 each. That’s a horrendous fall of 9.2% in less than four months.
I spent a month in Canada in May 2007 and the second most discussed topic was the hardening of the Canadian Dollar vs. the US greenback. US$ 1 got you around CAD 0.95 or so then. Today they must be breaking out the champagne in Canada in anticipation of Canadian dollars overtaking its US counterpart permanently. I just checked at the US $: Canadian $ is 0.998035.
I can visualize secret discussions taking place at various government offices around the world to fix the US dollar. “Let’s get our own back at America and screw their currency” seems to be the recurrent theme at these meetings. “A weaker dollar means that they will have to pay more for everything. It will directly hit the US people where it matters most……right in the stomach”. I can visualize the bankers of various countries unleashing tons of unwanted dollars on various international currency exchanges. The dollar takes a dive. Bankers in the US jump out of the window. Elsewhere in the world bankers look at each other and a secret message passes between them. The faint twitching of their lips could be taken for a smile.
For every action there is an equal reaction. Isn't thatwhat we learnt at physics? Any Indian software engineer will testify as to how untrue this statement is. How has she been affected by what happened to the US dollar? Her boss is smiling less. That’s because 80% of the company’s earnings are in dollars. That means that the company’s bottom line is being hit. The company cannot increase prices; the international market is horribly price sensitive. This leaves only one possible course of action – slash perquisites. Soon, to add insult to injury, the working day becomes even longer. Fourteen hours at the office becomes the norm. There’s even talk about doing away with the five day week.
Suddenly companies that don’t have a great presence in the US become popular targets for job seekers in the IT industry. And HR managers go around with currency converters. They wouldn't like to blink when a potential employee tells HR that she is looking for a CTC of 115581 AUD p.a. and would even be willing to settle for 700,000 ZAR p.a.but on no account will she consider 100,000 USD p.a.
Stay tuned!
