What the shrinking dollar means for Asia

Falling currency means that we all end up dirt-poor
By Nury Vittachi

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I’ve just come back from the bank, where I had to change money from one currency to another. This really annoys me. In the queue, I worked out that if you change your money 13 times, you end up flat broke without actually having bought anything. Worse still, I’ve just realized I change money 14 times a year. That means I can save time and energy by just staying at home and burning my life savings.
               In ancient times, when the world was young (and Keith Richards had already began to rot), the practice of changing one form of money to another every time you crossed a national border began.
              This was particularly bad news for people from South Asia. Their currency, the rupee, was set at a very low exchange rate: one rupee was equal to one speck of dirt.
              I recall my father’s long face every time we used an airport money-changer. We got a handful of dirt. And those were the good days. Other times we just got a laugh.

Today, everything has changed. The various brands of rupee are still worthless, but thanks to financial terminology, the situation is expressed far more elegantly. We now say 0.9897 rupees equals 0.9897 specks of dirt or 1.075 seconds of laughter, which I think you’ll agree sounds better.

In the old days, the most confusing currency was the Pound, a British banknote which (rather suspiciously, I thought) weighed only a fraction of a pound.

The British currency was famously complex. The pound was divided into shillings, pence, florins and penny-farthings, coins which were so large they were used in Britain as bicycle wheels. The British also had a huge variety of coins, such as guineas, half-crowns, tuppences, quids, grands, optics, drams and snifters.

The first transaction I ever had on a visit to London went something like this:

Me: How much is that?

Airport shopkeeper: Two grand, a guinea-half-crown, three shillings, half a snifter and tuppeny-ha’pence-farthing.

Me: Oh. Do you accept rupees?

Airport shopkeeper: Yes sir. That’ll be forty googillion rupees, but I will have to give you the change in dirt and sneers.

Only after I got a job as a financial journalist did I learn how the system worked. The main world currency was the US dollar, colloquially known as Greenspans. The Greenspan was divided into bucks, dimes, nickels, quarters, eighths, sixteenths, semi-colons, jots and iotas.

               And after many years of earning a monthly handful of dirt in Asia, I eventually got a job where I was paid in a currency fixed to US dollars. I pictured myself swanning back to my home town, pockets overflowing with Greenspans.

                But what happened? From the day I started that job, the US dollar started falling in value. Down and down it went, into a hole which makes the Marianas Trench look like a scratch in a piece of marble or Kim Jong-Il’s head, whichever is denser.

               The last time I visited Sri Lanka, I took a wad of US dollars and a wad of rupees.  This was the way to get a good deal, I said to myself. No such luck. At the airport in Colombo, I checked out the rates for both my currencies at the moneychangers. I got two handfuls of dirt and a double-portion of sniggers.

Comments

[Peter Emmett]

I thought loan-sharking was illegal until I came across airport money changers - talk about extortion!

I remember my first trip to Istanbul for a week and being overwhelmed trying to pay the taxi driver for a trip from the hotel to the office. The taxi driver was always in a hurry and counting the the number of zeros on the banknotes, whose number were all bunched up close together, was mildly nerve wracking. The taxi trip was roughly 2,000,000 Turkish Lire (before the New Turkish Lire), which I believe was roughly 8USD.

I did have a laugh though when the visa bill came through for 250,000,000 Turkish Lire, which I believe was roughly 1,000 USD at the time.

I'd heard the currency went up to 1,000,000 TL to the 1 USD, before they realized that to join the EU they needed to lop off a few zeros.

Have a great week and if you feel like burning your cash, drop us a line and I'll come round and pick it up and help burn it for you :-)

[Jan]

I rather like currencies which allow me to indulge, at least momentarily, in my fantasy of being a millionairess, before blueing the lot on a glass of wine.

[Mrs Wicking]

For the first time in a long time the Australia dollar is reasonably strong, therefore allowing us to travel overseas a bit more comfortably than before.

In Asia, we can go five star all the way, which can not be compared to five star in Australia - we just do not know how to do it at all!

Unfortunately, travel within Australia is beyond the reach of so many due to the high cost.

I love going to the ATM in Indonesia - we are sooooo RICH when we get the transaction receipt stating our balance, in fact multi millionaires - oh to aspire to making it into the billionaire stakes!

[Mr Bean Less]

It seems to me that there must be a huge psychological difference between paying 50 billion currency units for something and paying five currency units for something, even if the actual value is the same. Has anyone done any study of this, does anyone know? For example, I suspect you could take a country which is demoralized and had a terrible time for years, and change the mood of the country by simply making a single unit of its currency larger than the US dollar. It needn't actually cost anything to make this change, becuase the change is simply made on paper, with no actual adjustment to the value of the money. Am I on to something here?

for example, Mr Emmett's hundreds of millions of Turkish lire existed when the country was down and out, but now that it is becoming a more developed country, it has abandoned all its zeroes.