Devaluation means an intentional decrease in the value of a country's domestic currency. This is an important tool that is adopted by governments as a monetary policy. It is often mixed up with the depreciation of currency that is relative to another currency like USD depreciates against GBP.
The reason for devaluation is to control imports and increase exports. When a currency devalues the domestic users are forced to restrict use of imported items as they are more expensive. On the other hand, the export items are now cheaply available for which the foreign users are encouraged to use imported products at cheaper rates. This will turn the balance of payments in a more favorable position and reduce the trade deficit.
Explain the effects of the pound devaluation on: (1
Merlin Corporation of the United States imports raw material from Indonesia on
How will a dollar devaluation affect businesses and consumers in the twin
Inc. In 1993 Icelandic Enterprises was incorporated in Reykjavik to manufacture
Mexico experienced large-scale trade deficits, depletion of foreign reserve
A Ford dealer in the United States may be exposed to a
Assume the following: • Inflation and Zambian kwacha (ZMK
What effects might the devaluation of a nation’s currency have on its
Imagine that you are a financial manager of a multinational corporation,
General Electric Company’s worldwide performance evaluation system is based on a policy
