How COVID-19 Is Impacting Global Payment Transfers

The COVID-19 outbreakhas had a severe impact on the global economy and has taught many world governments that relying on a single country’s currency as a global baseline has the potential to be catastrophic. The COVID-19 impact on world markets has been reflected in the global foreign exchange, and as it trickles down to every part of the economy, including global payment transfers,we can finally see just how it’s effect can be divided.

With that being said, let’s take a look at the three categories the COVID-19 impact can be divided into:

Demand Shock-quarantines, travel restrictions, and global disruption have had a negative effect on the demand for consumer goods & services, tourism, hospitality, and more.

Supply Shock- with global supply chains disrupted or completely stopped,there is no clear resolution point.

Financial Shock-a lack of cash flow and liquidity is making the future of big business uncertain, and the global financial safety net isn’t able to help.

And when it comes to global payment transfers, most global banks rely on the U.S. dollar as a baseline currency. The problem with that during the COVID-19 crisis is that many global currencies are losing value against the USD. Let’s take a look at some of those currencies and percentages now: (Currencies without a percentage are either because the actual rate of loss was less than 1%, or the global markets were too volatile to provide an accurate and up to date percentage.)

Currencies Losing Value Against The USD

MXN – Mexican Peso

COP – Colombian Peso

RUB – Russian Ruble

UYU – Uruguayan Peso

BRL – Brazilian Real: 4.2%

ZAR, NAD, SZL, LSL – South African Rand and pegged currencies: 3.8%

SDG – Sudanese Pound: 12%

ZMW – Zambian Kwacha

KZT – Kazakhstani Tenge

IDR – Indonesian Rupiah

NOK – Norwegian Krone: 4.1%

CLP – Chilean Peso

AUD – Australian Dollar

BYN – Belarusian Ruble: 11.3%

ILS – Israeli Shekel

UAH – Ukrainian Hryvnia

NZD – New Zealand Dollar

ISK – Icelandic Krona

TRY – Turkish Lira

As you can see, with the volatility of the global market, global payment transfers can be more challenging to complete than before the COVID-19 crisis. This makes digital banking that much more effective and efficient.

Contact Fortu Wealth

To learn more about the future of the private banking industry, contact Fortu Wealth today and speak with a financial representative who can answer any questions you might have.

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