Why devaluation of currency a big step toward economic growth. - page 2.

mu_enrico

copper member

Activity: 2324

Merit: 2142

Slots Enthusiast & Expert

China sucks, go away CCP shill Tongue

China devaluates its currency simply because they want to keep their products' price low (cheap) thus remain competitive, yes they can do that since they have cheap sweatshops. But artificially changing anything will affect economic efficiency. They will need to import at some point, also pay its foreign debt. In the end, foreign countries will react, and everything will come back to the previous state (equilibrium). Any government intervention only useful in the short run.

tyz

legendary

Activity: 3360

Merit: 1533

Very simple! When a currency is steadily devalued by inflation, most people save less. That means they spend the money and the economic cycle gets going. That means more demand for goods and services, which creates more jobs and more tax revenue for the state. In addition, the state can also borrow more money, because the old debts have lost value and so the politicians can make themselves popular with the electorate by additional money through benefits for the people. Therefore, a government never has the interest to keep a currency stable in value.

paxmao

legendary

Activity: 2394

Merit: 1632

Do not die for Putin

Absolutely bollocks. A devaluation is not a "bold move" or a "good thing for the country", but rather the recognition that the economy is no longer competitive enough to maintain the level of imports that the citizens of the country are currently enjoying. The equivalent in a domestic environment would be the parents deciding that they need to spend less because they are not getting enough to keep with the expenses - it is as simple as that.

Devaluation is the last resort and is a defeat under any prism. Politicians tend to mask that reality since the beginning of times saying "this will help our economy", "we will sell more", etc... That is just to avoid saying you need to consume less imports because your products and services are not competitive.

Jawhead999

legendary

Activity: 1862

Merit: 1209

You need to know the difference between products which exported from China and Africa, China mostly exporting electronic, machine, and other things that can be produced. While Africa mostly exporting precious metal, diamonds, raw material, and other things that scarce. If this scarce things keep been hunting, then one day it will run out.

Africa are lack of money and foods, so they always rely on foods imports. So it's useless if Africa devaluing their currency since they always rely on imports. Devaluing or depreciating currency isn't the main problems on Africa, but the corruption, politics and ecocystem.

Ucy

sr. member

Activity: 2730

Merit: 403

Compare rates on different exchanges & swap.

Interesting. If a currency can be adjusted the way you describe, by a government, what stops other countries from increasing the value of their currencies?

Well, I guess every country have basic local things they can easily depend on without problems, even if they are completely cut off from the rest of the world.
I think some people are more careful going deeper into the Matrix/system than others... What's is more important is that we live more with nature than inventing/creating evil things.
I hope we have couragous people in the continent refuse to abandon their good cultures while building and developing the societies with good/safe technology.

Bontexkenzy

newbie

Activity: 21

Merit: 1

Devaluation of currency is a cautious move by the government of a country to decreasingly adjust the value of its currency.

China as a country is dominating the world market and economy because of that bold move.Because of the massive industrialization in china couple with the large productive population, capital intensive production and most importantly good maintenance of the nation resources.

Since china is one the most exporting countries in the world, china devalue the Chinese yuan which made imports expensive and export cheap.

Chinese taste for foreign good reduces, infant industries in china are protected, china has a surplus balance of payments which lead to economic growth and development.

But what is happening in most developing countries especially In Africa is not devaluation of currency but rather depreciation of currency.which is cause by low level of industrialization Imports based economy.

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