MONEY EVERYWHERE!

Here's the skinny on the currency exchange.... we are given a salary in US dollars. We then "buy" Romanian Lei (our local currency) with our dollars. Now, until about 3 years ago, the Romanian economy was based on the US dollar. Now, it is based on the Euro (the European currency). This is the first bit of bad news. The EURO costs more than the DOLLAR, so it has more value. To get 100 Euros, we'd spend around $130. Prices here are based on the higher value, so we spend more.

Now, today, $1 will get us 2.51 lei. So, a 50 lei item will cost us $19.92 (it would cost our family of 4 this much to eat at McDonald's). When we moved here 3 years ago, $1 was worth 3.30 lei, so the same 50 lei meal would only cost us $15.15. See the difference? Our salary remains the same, but the value of it falls every month because we get less and less for the exchange.

When we do the math, two things happen. EVERYTHING now costs us more for two reasons: our currency (the dollar) is less valuable AND prices rise because of the success of the euro. Double whammy!

In reality, if we receive $100 from someone, automatically $30 is lost because of the Euro / Dollar value. Then, from the $70, we receive even less because the value of the dollar continues to fall.

For example, everyone pays rent in Euro (us too). Let's say you pay 400 euro in rent. It costs about $525. Also, you have the 30% issue, so there's another $157. So, your rent is actually costing over $682. Make sense??

It's complicated ...money exchanges and all!