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Post: Uncovered an old currency that lost against the dollar


Pound - RIA Novosti, 1920, 03.10.2022
pound. Archive photo

Economist Badalov announced that the sterling fell to a record against the dollar.

MOSCOW, October 3 – RIA Novosti. The sterling, Europe’s oldest currency, experienced its biggest decline exactly thirty years ago, and today it has dropped to a minimum against the dollar, said Prime agency, economist Lazar Badalov.

“On September 26, the pound fell to $1.03 against the dollar and broke the historic low of $1,054. The current drop in the pound has a good chance of breaking a 30-year record, both in terms of depth of decline, duration and economic implications for the UK, ‘ said the economist.

In 1992, against the background of the volatility of the foreign exchange market, the Bank of England had to withdraw from the European Monetary System (the ancestor of the modern Eurozone), but then the reasons for the instability were more of a speculative nature, but today everything is different, the expert recalls.

In his view, the energy crisis hit the British economy drastically, as subsidizing energy costs would only increase public debt. Against this backdrop, the Bank of England is raising interest rates to deal with galloping inflation.

It’s a classic spiral where politicians increase spending to restore voter confidence and, in turn, the economy faces inflation. The economist concluded that further steps to inject money into the economy would only lead to higher inflation and a depreciation of the dollar.

Source: Ria

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