 Author |
 Post
|
 |
|
snyamhuno
Joined: Feb 27, 2007
Posts: 25 (view all)
Poster Rank:
Talkative
User is
Offline
Gender & Age: Male & 28
Country: South Africa
Province/State: Gauteng
City: Johannesburg
|
Devaluation
April 29, 2007 - 07:57 AM
|
|
Is it beneficial for an economy to devalue its currency to boost its economy against an overvalued currency
|
|
back to top |
link to this post
|
|
Judith
Joined: Feb 17, 2003
Posts: 24 (view all)
Poster Rank:
Talkative
User is
Offline
Country: United States
Province/State: New York
City: New York
|
Re: Devaluation
May 6, 2007 - 05:19 PM
|
|
This entirely depends on the situation prevailing in the reference country. If the country is experiencing a huge current account deficit and its looking for a way to finance it, one of the best approaches is to devalue the currency. This has been in practice since the implementation of the Gold standard exchange rate system and followed into the B-wood system. However, the Central Banks can do this with approval from the IMF. There are obviously consequences that result from devaluation, take for instance the devaluation of the dollar in 1994? that resulted to the Asia crisis. Ultimately, the decision to devalue should depend on what the effects of holding an appreciated currency will have to the economy. This may include increase unemployment and even increased number of people living below standard living conditions.
|
|
back to top |
link to this post
|
|
Hayk
Joined: Dec 20, 2005
Posts: 964 (view all)
Poster Rank:
Blabbermouth
User is
Offline
 Virtual Volunteer
Country: Egypt
Province/State: Al Qahirah
City: Al Qahirah
|
Re: Devaluation
June 29, 2007 - 11:02 AM
|
|
Read the wikipedia site on devaluation, for starters.
Further on, I can bring you more info and asnwer your questions if you get any.
|
|
back to top |
link to this post
|
|
|
Display posts from:
|
Home
Community
