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I saw that Lebanon or Zimbabwe are facing very complex problems in their economy.

I am from Sri Lanka. I hear news every day that our country doesn't have enough US dollars. So the government has restricted importing vehicles and pub limitations on many non-essential products. So they try to save dollars. The main reason for that is (I think) we have a lot of foreign loans and now we don't have the tourist industry because of COVID 19.

Sri Lanka rupee is depreciating against the US dollar because of many reasons like printing billions of money monthly.

I have around LKR 2 Million (which is equal $10,000) savings. What can I do with this money because if the LKR depreciates against the USD very quickly like in Lebanon or Zimbabwe, I know LKR 2 Million will be nothing.

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    Note that anything you do about it will probably help make the country go bankrupt more quickly. If a country goes bankrupt because it has too many LKR compared to its amount of USD... then if you buy some USD in exchange for LKR, now the rest of the country has even more LKR and even less USD. Like a country-sized bank run.
    – user253751
    Sep 15 at 16:43
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    @user253751 Yes I understand what you said, but unfortunately; what we can do, Our politicians destroyed our country.
    – Balla
    Sep 16 at 4:20
  • one can say your money is already worthless and the only chance you have, is to trick someone into thinking it's not, before everyone else has the same idea. And that the government prevents these measures because (if corrupt) the government wants to be the one who wins from the tricking (or if not corrupt) the government doesn't want some people to win more than others.
    – user253751
    Sep 16 at 8:03
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If you want to hedge your currency risk, you would exchange your rupees for some other currency or commodity. But if your government is concerned about its solvency, it is likely placing restrictions to prevent everyone from doing precisely this and driving the rupee down further.

The classic commodities for conserving wealth would be value-dense materials like gold. But it is likely that you would have to pay a high premium for gold in your country given the situation. At least, if there is something you eventually want to buy, like a car, and you can buy it now at a reasonable price, you could decide to do so now rather than take the risk of future price changes.

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  • Car price is too high in Sri Lanka now(since sri lanka has around 400% car tax rate car prices are high even before this crisis, now it is worst after restrict importing vehicles). 2018/2019 Toyota Premio/corolla around LKR 15 - 20 million (around $75,000 - $100,000). For just LKR 2 million ($10,000) I can buy only some very old Nissan or Toyota cars with the year 1990-1995 and some Indian cars before 2005.
    – Balla
    Sep 15 at 3:55
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    Would buying a house or land be an option?
    – gaefan
    Sep 15 at 11:08
  • @gaefan Yes, I am also thinking the same. It isn't possible to buy a house for that amount, but I can buy a very small land for that money. I think it is better because we have negative interest rate in our country which means inflection rate is higher than bank interest in our country
    – Balla
    Sep 16 at 4:36

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