By Hawkins Teague
The Associated Press
MURRAY, Ky. (AP) — When the financial crisis hit the United States in September, it caused many Americans to panic. What most didn’t realize — but what is all too clear for Murray State University’s international students — is that the crisis actually caused the U.S. dollar to increase in value relative to some nations’ currencies.
Mike Basile, the director of MSU’s Institute for International Studies, said that many of MSU’s international students were feeling the crunch and finding that when their parents send them money, it doesn’t go nearly as far as it used to. This has especially been a problem for students from South Korea, who make up the bulk of MSU’s English as a Second Language program. One of the few groups that haven’t been hurt as badly is Japanese students, he said.
Hyuncheol Lee is among the students from South Korea who has had a harder time stretching his finances lately. He said that when he started the semester in August he could exchange about 1,000 won for a dollar. Since that time, the won has gone down in value about 50 percent relative to the dollar.
According to xe.com, a currency converter site, one dollar was equivalent to 1,475.62 won at 7:30 a.m. CST, Dec. 5.
Lee said he had wanted to travel home during the winter break, but that the lopsided exchange rate would make it too costly so he had decided to stay at a friend’s house in Tennessee instead.
As if the exchange rate problems weren’t bad enough, he said the South Korean economy is doing so poorly right now that he can’t ask his parents for more money to make up the difference.
Another South Korean student, Ha-lim Jang, said she still planned to go on a big trip with friends over the winter break to New York and Boston. While the economic woes haven’t caused her to cancel entirely, her friends did eliminate Chicago and Orlando from the itinerary.
Lee said he had been eating out fairly often but was cutting back.
Jang said that most international students without meal plans were saving money by cooking in their residential colleges.
Bill McKibben, an international student adviser, said that many of the students’ parents set aside a sufficient amount of money before they came to Murray, but that it is no longer near enough. A few students have asked him about additional scholarship opportunities, but he has had to tell them that they are all spoken for.
Murray State economics professor Seid Hassan explained that after the dollar had been sinking for a long time, international investors caused its value to go back up again after the collapse of the U.S. financial sector. He said this was because they realized that even though the U.S. economy was declining, the overall impact on their investments would not be as drastic as in other countries because the size of its economy is bigger than most.
Because they lost their confidence in world markets, many investors chose to take their assets out of European and Asian markets and move them to the U.S.
“They decided to choose the lesser of two evils,” Hassan said. “The result was the appreciation of the U.S. dollar.”
Hassan said that the current heightened value of the dollar would not be good for the U.S. economy in the long run. For one thing, it will likely fall again. Another point is that the U.S. can export more when the dollar is lower because the prices are more attractive to foreign countries.
He said MSU would be much more of a draw to international students once the dollar goes back down. ♦
Information for this report was taken from the Murray Ledger & Times.