Financial Wellness

7 Tips for the Pocket when the Dollar Falls in Price

The fall of the dollar in various countries of the region has a positive impact on people's personal finances, constituting a golden opportunity to buy abroad, travel and even invest.

person holding dollar bills

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LatinAmerican Post | Julián Andrés Pastrana Cuéllar

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The dollar continues to fall in several Latin American countries. In the Peruvian case, the US currency has decreased, in the first half of 2023, by 3.37%. In Argentina, the so-called blue dollar, one of the five exchange rates that are handled in that southern nation, has experienced Also a downward trend. For its part, the Chilean currency has also reported a small revaluation.

Regarding the Colombian situation, economists attribute the phenomenon, internationally, to Saudi Arabia's decision to cut oil production and the increase in the debt ceiling in the United States.

The truth is that this situation has led people to wonder what are the best recommendations to take into account to take advantage of the fall in the dollar. In this regard, specialists in this field opt for a range of options that includes purchase of currencies and investment in gold, pension funds and Fintech, as we explain below.

Dollar Purchase

Experts agree that at this time, it is a good alternative to buy dollars and wait for the currency to present an upward trend again. However, they emphasize that this should be done as a medium-term investment, considering that situations such as the crisis between China and the US could continue to weaken the currency in the future. On the other hand, acquiring dollars and saving in this currency has two advantages: on the one hand, it reduces the financial risk derived from the low rates of fixed terms and savings accounts and, on the other, it increases profitability.

Virtual Currencies

Another good option is to invest in digital dollars. According to the Colombian outlet La República, stablecoins (stable coins in Spanish) are crypto assets associated with the price of the US dollar. This gives them less volatility than other types of cryptocurrencies. Those who wish to bet on this virtual currency are recommended to analyze, according to their capital and payment capacity, the risk they can assume.

Also read: 6 Investment Options with Little Money

Purchases Abroad

With the dollar falling, the opportunity arises to make purchases abroad through online platforms, while comparing the prices of products in Colombia with those that have those same items in international stores. Likewise, it is the most appropriate time to buy plane tickets and hotel reservations, as long as it is done in dollars.

Credit Card Payments

Along the same line of international purchases, the Econexia business portal explains that carrying out such transactions, within the framework of the dollar situation, could mean an additional benefit if they are made with a credit card. The foregoing taking into account that the monthly fee that must be paid for items purchased abroad will be equivalent to the Representative Market Rate which, compared to the rates offered by conventional exchange houses, is more favorable.

Invest in Gold

Sergio Olarte, a Scotiabank economist quoted by El País de Cali, notes that the drop in the dollar constitutes a good opportunity to invest in gold or currencies such as the euro and the pound, since these currencies, given the fall of the dollar, recover value.

Pension Funds

Another good bet lies in investing in pension funds through a voluntary and complementary contribution. What is sought here is to increase the contribution made as an employee so that, once the pension is achieved, its amount is higher. In this regard, El País de Cali mentions that some insurers offer investment plans, which include income in dollars.

Fintech, another Good Option

Similarly, it is recommended to have assets in authorized Fintech investment companies. The idea is that these companies offer the possibility of acquiring shares in the US markets, while delivering yields in dollars, in such a way that, once the currency rises again, the profits also increase.

By following the above advice, consumers will undoubtedly be able to take advantage of the current situation with the dollar to lighten their pockets.

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