March currency review

Considering some of the world's newsworthy events lately, including a devastating cyclone in southern Africa and an ever-more-chaotic Brexit saga, March was a remarkably quiet month for exchange rates. Only a handful of currencies moved by more than 2% either way against the euro, for instance, as our tables below show.

Indeed, only the Argentinian peso moved enough to concern global mobility teams, falling by 7% against the euro during the month, despite President Macri vowing to do "whatever it takes" to stop the slide. Anyone involved in managing salaries of assignees in Argentina will know, not least from this blog, what a rollercoaster ride the peso has had in the last couple of years. Interestingly, as the last table below shows, there is a huge difference in the exchange rate movement depending on whether the analysis begins six months ago (-3%) or 12 months ago (-49%). A similar tale can be told for the Turkish lira. These examples again show the value of not reacting too hastily to sudden currency movements, because they often bounce back, as well as how vital it is to use consistent cost-of-living data applied over time, such as ECA provides, to calculate necessary remuneration adjustments.

In news elsewhere, further to our report on Zimbabwe's latest currency regime changes, the authorities there are now allowing the new RTGS$ to move in value according to a managed float, but it remains at least a quarter overvalued. Rates on the black market, which float freely according to market sentiment, continue to diverge. The latest official rate is USD 1 / RTGS$ 3.1, whereas the latest unofficial rate is USD 1 / RTGS$ 4.2.

Finally, here is this month's selected currency movements table: