British Pounds
For those who has been keeping track of the British pounds will notice the recent rapid depreciation of the currency. Over a period of two years, the pound has fallen almost 30% against the ringgit. How nice if I could delay paying my MBA tuition fees! There are many factors affecting the British pounds. The following are some of them: 1. Current account deficit Since 1997, UK's current account has been in bad shape. Having a current account deficit means that the country is spending beyond their means, or they are importing more than what they are exporting. This will increase the supply of British pounds that subsequently reduce the value of the currency. 2. Fiscal policy Over the years, the British government has been proposing a national budget that is bigger than before. The 2009 public spending on welfare and social security stood at 650 billion pounds which was equivalent to about 46% of the UK GDP. The unprecedented size of the UK budget deficit has in fact balked by many e