![]() ![]() ![]() Such currencies are called fixed or pegged. For example, Belize’s central bank decided its currency would be worth one-half of a U.S. dollar or the euro, and “peg” their own currency’s exchange rate to this currency. So who decides how much a currency is worth? For a handful of countries, it’s pretty straightforward: these countries pick a commonly used currency, usually the U.S. dollars, it actually costs roughly the same. Does that mean a chocolate bar is 14,000 times as expensive in Indonesia as it is in the United States? Well, no-if you convert rupiah into U.S. Different currencies are worth different amounts.Ī Snickers bar might cost you a dollar in the United States, but in Indonesia it could cost you over 14,000 rupiah. To understand what those decisions are, it’s important to understand why currencies have different values and how these values shift over time. Have you ever wondered why every country doesn’t just use the same currency? Wouldn’t life be easier if we didn’t have to waste time exchanging bills or calculating conversion in our heads when we travel? Well, the majority of countries have their own currency for a reason, and it’s a simple one: most countries have unique economic situations and want to make monetary decisions based on their specific interests and needs. ![]()
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