What happens after currency depeg & the value of our currency falls 25%
Hi everyone, I’m new to the site. I’m a millennial.
I have a lot of question & I’m having trouble figuring out my countrys economic future.
According to the IMF our currency which is pegged to the Singapore dollar is 25% over valued.
Oil & gas makes up for more than half of our nations GDP.
We have a lot of Government subsidies from food, gas , free government pensions, free healthcare, free Education, government housing project,etc.
For the past few 3 years our country has been in recession.
Unemployment is increasing, a lot of Government budget cuts.
Our oil & gas industry has had quite a few layoffs because of low oil prices. Statistics shows our Oil production peaked in 2005.
According to BP World Energy we have oil left for just 20 years.
So my questions are whats gonna happen if we do depeg? Is it likely we will depeg?
Sorry I mistakenly wrote something about U.S. dollar.
Usually if a currency devalues by a certain amount then anything you import would rise by that amount. It would not have an effect on things that are made domistically (unless they have imputs that are imported i.e. energy, gas, oil etc.).
So figure out what percent of your economy is domestically produced vs imported. Say its 50/50. Then 1/2 your economy will rise by 25%. Half will remain about the same.
For you personally what do you buy on a daily/weekly basis. For Us in the USA most people buy groceries, gasoline, utility bills. So those would be the biggest factors to consider. Does your country import most agriculture and energy? If its 100% imported and is soars 50 percent. Those things will Cost 1.5x more.