Similarly, currency conversion can be done using various rates. There are advantages and disadvantages of using both, however the Retroactive Currency Converter uses the GDP deflator for the present value calculations. The most common is done using the macro economic data such as the purchasing power parity (PPP) or the Gross Domestic Product (GDP) of a country. There are multiple ways to deflate past expenditures. If you have an expenditure in Rwandan Francs in 2015 you could convert to USD in 2015. For example you could calculate an expenditure from 1966 made in Rwandan Francs to USD in 2015 (or any other year between 19).ģ) Convert currencies-It also allows you to convert between any global currency to any other global currency. For example, if you have expenditures in USD from 1966 you could determine the value in 2015 USD (or 1967).Ģ) Past Year to Present Year and converting currencies- The tool has the ability to deflate past expenditures in one currency, and the convert the currency in the desired year. The Retrospective Currency Converter can be used in three different ways:ġ) Past Year to Present Year for one currency- This tool allows you to deflate past expenditures to understand present value or the value at a given year after the expenditure was made. Similarly to understand what the present value is of previous expenditures it is necessary to “deflate” the value of those past expenditures using a historical record of inflation rates. Projecting future expenditures is done using the present inflation rate. Similarly, the present value of a dollar that will be spent ten years from now is less than the value of today’s dollar. We understand that a dollar (or euro, pound, etc.) today is worth more than dollar in ten years’ time. Therefore historical expenditures need to be adjusted, brought to a common year and currency to be compared. However, when doing the analysis to derive the cost estimates, it is important to compare like with like. Having multiple years of data will provide more reliable estimates and account for any outliers that might lead to over or underestimates of the costs. For example, in order to understand the operating costs of pump, it is better to review a database of annual expenditures that covers 5-10 years versus reviewing only the past year. The reliability of these estimates is related to the number of data points that are analysed to derive the estimates. These methodologies often involve reviewing historical records of expenditures in an effort to derive estimates that can be used for financial planning purposes. Methodologies, such as Life Cycle Cost Analysis, have been developed to analyse and predict these costs. Understanding the costs of supplying sustainable water, sanitation, or hygiene (WASH) services is an important first step to be able to finance and plan for these services. Contact us in case you have any questions or suggestions via This tool has been developed by IRC and Aguaconsult. We invite you to use the tool and send us your feedback. Please note: this is a beta-version of the Retrospective Currency Converter this tool is currently being tested in several countries.
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