One of the recent currency fluctuations event impacts on the transactions of international business, Elanco Animal Health Incorporated (NYSE: ELAN). In this sense, the event impact on portfolio of services, as well as plan for shareholder value (Business wire, 2022). Hence, for sustainable growth and improvement of profitability, the Board made decision to change Board of Directors. As a result of fluctuation of currency, it impacts on seasonality and fulfilment of demands. The business faced risk of currency fluctuation. In order to overcome this, the business adapted different distribution channels. The business faced increase or decrease its sales, as well as fluctuation in revenue.
Also, it is found that
since the 2008 global financial crisis, Chinese currency level (the yuan) hasn’t seen and is closely monitored, accordingly. In order to help boost the exports, China unethically keeps the currency low. China is trying to do keep the yuan stable. The Chinese currency doesn't work or freely traded like other currencies. In the months ahead, the currency of China will be under pressure. A weaker yuan can assist lift growth from making exports of China more attractive to the rest of the world. Further, it is found that for the domestically listed companies, China increased the subsidies in the year 2018. The second largest economy of the world is China. China provides subsidies to companies that help meet aims in technology and Research and Development (R&D). Also, China offers subsidies to companies that participate in national infrastructure projects. Hence, more companies are willing to do projects with the Chinese government to get subsidy. Subsidy only covers 3.545 listed companies and not includes private companies as well. Further, China does not offer tax break to attract more investment from international companies. All of the efforts contribute to stabilize the currency of China.
References
Business wire, (2022).Elanco Announces Changes to its Board of Directors. Retrieved 9 September 2022, from https://www.businesswire.com/news/home/20220908005346/en/Elanco-Announces-Changes-to-its-Board-of-Directors
Asline Belcourt
As a foreigner or immigrant, I personally have faced the currency fluctuation when sending money to family members back home. Whether through MoneyGram or western union or CAM, the US dollar would be worth about 30 times more of our dollar. Which tells me that things are getting pricier in my country, and no one can afford buying the food. Fluctuation had caused many countries’ currencies to either increase or plummet and can affect tourism and businesses that operate in these countries. When this happens, it affects a nation’s entire operation meaning that it cripples the country’s wellbeing(Finance, 2021).
Let’s talk about Haiti for example. My grandparents when things were doing great, build a mansion in Haiti as their retirement home. They bought the land than have an engineer from the United States designed the house plan which if they were to build it in this country would have cost them closed to a million dollar if not more. These 7 bedrooms home and 4 bathrooms in the northern part of Haiti cost them only two hundred thousand dollars to build. Now, this house is collecting dirt in Haiti because both my grandparents are retired and afraid to go to Haiti due to the kidnapping for ransom or they will kill you. The main reason they are more afraid was because my grandmother’s nephew was kidnap while preaching in church and we watched it live on YouTube not knowing he was being kidnap until we received that phone call for ransom. I always tell people to be careful when going to Haiti specially if you are going for the first time. Always look for the do’s and don’t before going to Haiti.
Currency exchange rates do impact a country’s economic growth, capital flows, trade of merchandise, inflation and interest rates. Many investors take advantage in investing in countries that have a weak economy meaning that the dollar of these countries worth so little that it generates higher returns in US dollar terms. Many people do not really care about this exchange rates issue because it does not affect them. The only time people pay attention to exchange rates are when importing money oversees/ payments, foreign travel/tourism and money transfers/ transactions on occasional basis(Segal, 2021).
References
Finance. (2021, July 28).Why Do Currencies Fluctuate?Retrieved from Remetly Promises Delivered: https://blog.remitly.com/finance/currencies-fluctuate/
Segal, T. (2021, June 4).Currency Fluctuations: How they Affect the Economy. Retrieved from Investopedia: https://www.investopedia.com/articles/forex/080613/effects-currency-fluctuations-economy.asp#:~:text=Currency%20fluctuations%20are%20a%20natural,capital%20flows%20and%20so%20on.