Rates in United States Why should interest you ?
Rates in United States Why should interest you ?many means of communication speak enough about the rates of interest of the country American but, would really is important know that information? Even what can be useful?
From mid-2015, economists came expecting an increase in United States interest rates, which finally happened in mid-December of this year, once it had remained unchanged for 9 years and went from 0.25% to 0.50%: one thing related to something called the FED and a lady who said that they would keep. All that sounds very complicated and it seems that it has nothing to do with the country, or well, maybe by “the dollar” – think many-.
To understand that, let’s go by parts: the FED or fed, is the United States central bank as it is here, in Colombia, the Banco de la República. And the “Lady” that said that was to upload them rates is Janet Yellen, it Director of it FED that is who communicates them ads taken by your team (as the Board directive of the Bank of the Republic, in Colombia) on themes economic.
Now, interest rates that central banks are a mechanism that allows a kind of management on the things that make people about money. The Bank of the Republic defines these rates as “the price of the money in the market financial.” As the price of any product, when there is more money the rate low, and when there is scarcity raises”.
This means that this interest rate influences whether people want to or not to buy: “when the interest rate rises, the plaintiffs wish to purchase less, i.e., request fewer resources on loan to the financial intermediaries, while providers seek to put more resources (in accounts of savings, CDT, etc.). “It contrary happens when low the rate: them demanding of the market financial request more credits, and them suppliers withdraw their savings”, says the Bank.
Then, when it speaks of the FED, Ms. Yellen and the level of rates; What really is speaks is how le is going to the economy of that country and by that so many means of communication you give importance.
FP you suggests read “changes that should make in your life if really want (and need) Save”.
AJA, and then?
Of course, given the size of the United States and the economic power that is, all countries are very interested to know how is your economy.
Why? In our case, is necessary to have in has it following: Colombia is an economy open, i.e., that has a relationship of trade with other countries that is what allows them imports and exports. This also has to do that as well as become a sale and purchase of products and services, there are also people from abroad who come to Colombia to reverse and vice versa.
And United States is one of the major trading partners, i.e., we ship products that are created here in Colombia but, at the same time, we also buy them much of what they do. Then, if to their economy you goes well, to us also we could go well because would have more money to buy what Colombia produces.
But also can have an effect negative because then if les goes well, is because surely are paying best them investments in this country (them rates of interest), then who have investments in Colombia see that and prefer carry his money to USA and that, implies that many dollars out.
Then, all ends associated with everything. By that, still is is to the expectation of that at the end of this 2015 would have an increase of the rate of interest, since the conditions of the economy of United States are favorable.
• The dollar could climb in price
In accordance with the expert in finance, Jorge Saza, obviously if to United States you goes well, the people starts to interest is more by carry their money to that country, because has greater gains. Then, people who have investments here in Colombia take them and that makes that foreign money will go, therefore, there will be fewer dollars into the economy.
And so like everything else, when something is scarce, the price goes up. Then from here is emerge a series of recommendations, because the dollar would rise even more than price.
• The debts in dollars is made more expensive, so batteries
And if the dollar climbs, the debts in the foreigner also is make more expensive, because if before had that pay $2,900 pesos Colombian by a dollar, now will have that pay $3,200-only is an example-.
To who affect this? Mainly to them entrepreneurs, to them people that is borrow in dollars (as the young that is van to study to the outside) and to them travelers that buy with their cards of credit in the overseas.
• Products that are expensive
Everything that is bought with dollars and involving spend them becomes more expensive: then, for example, trips abroad are going to become much more expensive than are now. To this he is also added that everything is imported product can increase its value, such as cell phones or electronic devices.
• Buy shares
The really expert also explains that since foreigners are taking their money, “they liquidated positions”, i.e., sell their actions and investments in Colombia. This can carry to many actions down of price, so you can take advantage of that low price to make its investment and buy actions waiting for valuation, that itself, not immediate but to it turned of some years.
In this regard, Professor Santiago Rodriguez explains that “the impact on the economy is that it could generate as I mentioned an increase in the cost of debt, rates rise, therefore devaluation of investments”.
• If you can, save outside
As well as the foreigners, also you can take advantage of. Without you have choices, take your money to a savings account abroad, for example, United States. Thus, it has can rent more than what book in Colombia but, again, this depends of how much time leave your money.
Perhaps you are interested in “how get you advantage to the price high of the dollar”.
Since this had been waiting since months ago, which the market called “discounting the effect” occurs, i.e., already had prepared to make this happen. In September this was a rumor, a sort of advertisement, more not of an action specific. For example, a very different thing is when his mother threatened to take away the play station, but actually never did. However, with this simple threat, you already entailed is well.
In themes economic, those ads also move. Then all them investors already expected that is goes to raise the rate and begin, from already, to carry is your money. In part, by that we have seen that the dollar is urged both during these months.