GLOBAL RESOURCES ANALYSIS
HEADWINDS | WEAKENING CURRENCIES
Certainly weak currencies are a major headwind in transition processes. Companies in sliding currencies will not get easily governmental export guarantees for huge deals that can be made in times of economic transitions. Of course everybody wants to get debts in sliding currencies: the debt will pay itself by the sliding. But project performance in a sliding currency is a huge risk, which certainly not will be commercially insured by any wise insurance company. Companies in countries with weakening currencies will certainly export a lot of complete products (by their by the weak currency cheap price), but will not being able to perform as contractor for huge transition investment projects because the purchase power of their currency is a threat for the project delivery.
Author: Gijs Graafland
Back to Headwinds Index
Download the full Global Resources Analysis report in PDF