Foreign exchange: several African countries have a shortage of US dollars

DRC and Burundi also experiencing lack of physical dollars. BRICS needs to finalise the new currency situation asap. Countries like DRC  that trade domestically in dollars need to revert to national currency. Difficult times at present for ordinary people!

re posted from                    THE CONVERSATION

Foreign exchange: several African countries have a shortage of US dollars – why this happens and how to fix it

A number of African countries, including Kenya, Egypt, Zimbabwe, Nigeria, Ghana and Zambia, are currently experiencing shortages of US dollars. The dollar is the dominant currency in international transactions. These countries rely on the US currency to pay for foreign debts, essential goods and industrial inputs. Development economist Christopher Adam explains to The Conversation Africa’s George Omondi what causes US dollar shortages and how they can be remedied.

What is a dollar shortage?

Global trade is conducted in the currencies of the world’s major economic powers, principally the US dollar, the European Union’s euro, the Japanese yen and, to a lesser extent, the Chinese renminbi and the UK’s pound sterling. Individuals, firms and government elsewhere in the world need these currencies to import goods and services and make other payments overseas.

A dollar shortage is simply a situation where the demand for this foreign currency exceeds the available supply, at the current exchange rate.

Depending on how the exchange rate is determined, a dollar shortage will present itself in different ways.

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