Strong currency fluctuations are ahead
This article was published with the positive vote of five people from Mohammad Hossein Adib’s research team and the negative vote of four people
1. Risk means fluctuation
2. Strong upward and downward fluctuations in the field of currency are ahead
3 ⃣ To the extent that the dollar becomes more expensive, the goods of foreign exchange origin do not become more expensive, the goods of foreign exchange origin increase in 80% of cases only equivalent to 75% of the increase in the exchange rate.
4. The market should not think that the fluctuations of the dollar rate will always go down or always go up in the next one year.
5. When the dollar has a downward movement, if the economic operator has debt or current expenses that need to be paid, he usually cannot wait until this decrease is neutralized in the next upward trend, because he has Rial debt, so the maneuvering power of the economic operator is limited.
6. If an economic operator gets stuck in several upward and downward movements of the currency, most of his wealth will simply be lost
7. Therefore, while the economy is currency-oriented, and the price trend of the dollar in general will be upward despite numerous fluctuations (upward and downward), but the economic operator who has a stock of goods of foreign exchange origin has been severely affected.
8. Upward trend can be converted to downward trend under three conditions:
Solving the problem of economic sanctions
Banks’ inability to pay exorbitant interest on deposits
Eliminate energy subsidies
The economic operator must manage his business in such a way that he has the power to maneuver if one of the above three options happens
9. Most of the economic activists only pay attention to the upward trend of the currency, which is a strategic error in business management.
01. The blow that economic actors receive from the upward and downward fluctuations of the currency neutralizes most of the profits caused by the general upward trend of the currency.
1⃣1⃣ At the same time, with every increase in the exchange rate, the market becomes weaker and the sales of economic activity decrease, an increase in the exchange rate means a decrease in the income of the economic activity.
Conclusion:
The market faces 7 simultaneous processes
1 ⃣ loss due to the increase in the price of goods with currency origin lower than the dollar rate
2. Loss due to the downward fluctuation of the dollar
3⃣ profit due to upward fluctuation of the dollar
4. Damage caused by wrong predictions in upward and downward fluctuations of the dollar rate
When in the third week of March, the banks paid 20% interest to the deposits for ten days, some people sold their dollar balance at the rate of 4700 Tomans and deposited it in the bank, and now their wealth has almost halved.
Those who bought currency at the dollar rate of 9 thousand tomans have now lost 18%
The downward movement of the dollar is offset by upward movements
Those who entered the currency game in the past month all lost, and those who entered the currency game in the previous month all benefited.
5. Decrease in sales due to the lack of increase in people’s purchasing power in proportion to the increase in the dollar rate
6. Economic activists should not think that the upward movement of the currency has stopped, another upward movement is ahead, followed by a downward movement.
7. Those who can participate in the currency game who have the capacity for extreme fluctuations in the dollar rate
@adibmh
This post is written by FaraDanesh1