Currency Depreciation Essay

The exchange rate is the price of one currency in terms of another. A fall in the value of the pound is known as a depreciation and affects both the level of aggregate demand and the costs of production for firms in the UK economy. //One way in which a fall in the exchange rate can be beneficial for the UK economy is that it “should

The currency of India has been falling much recently against the dollar, as the risk adverse global investors start getting worried about the deficits, as efforts are being made by the central bank to stem the slide of the currency. According to Fact Set data, the rupee hit 54.44 against the dollar, in December, 2011. According to the analyst, it is expected that the rupee may continue to weaken further, as Eurozone jitters dovetail with the raising worries on the slow growth rate, fiscal deficits and the current account.

(iv) Your country is in a recession. You feel that a policy of exchange rate depreciation will stimulate aggregate demand and bring the country out of the recession.

Currency intervention is the action of one or more governments, central banks, or speculators that increases or reduces the value of a particular currency against another currency – this is according to Wikipedia.

The value of the Canadian dollar tends to moves in tandem with oil prices so as oil prices have been falling recently, so has the value of the Canadian dollar. A depreciation of the Canadian dollar makes Canadian exports relatively more competitive in the world market however, as Canadian exports become cheaper relative to its imports, this negatively affects the Canadian terms of trade. This

It is well-known fact that near about 86 percent currency circulation in India was composed of 500 and 1000 currency notes. And demonetization of these notes made people deposit their money which was in the form of 500 and 1000 Rs notes into the banks. RBI had declared Bank had received Rs 5.12 trillion worth of deposits until 18th November. This deposit of money can boost Indian GDP by 0.5 to 1.5 percent.

During the second half of 1997, currencies and stock market prices plunged in value across Southeast Asia, beginning in

When we look at the exchange rate against the USD from 2012 to 2015, there is decreasing trend. This shows that the value of AUD is declining. This is determined by demand and supply of AUD in the market.

Assuming U.S. goods and foreign goods are substitutes, more demand for American goods creates more demand for U.S. currency. More demand of the U.S. currency relative to the demand of the foreign currency due to a given market force (let’s say for example economic growth in U.S) will cause the U.S. dollar to appreciate. Therefore, the U.S. dollar appreciates as demand for U.S. dollar increases from foreigners, and at the same time, the foreign currency depreciates as they supply more of foreign currency to purchase U.S. dollars. This is illustrated by the graph

With the economy constantly changing, we are starting to see drastic changes in our dollar. A countries currency determines their strength in the market and their inflation rate. With a higher inflation rate, they are able to buy more and do more for a cheaper price. To help us better understand the difference between the weak dollar and the strong dollar, we will go in depth with both weak and strong dollars and its advantages and disadvantages, the currency monitor, the causes of the weak and strong dollar, and how it fluctuates and affects operations.

With the mortgage crisis recorded in the United States, the country’s currency declined in value in respect to other world currencies. Increase in money supply led to an increase in the volume of money in circulation in the United States. This led to a rise in prices of goods. Because of this, the value of the dollar declined in the international money markets. The decline in value of the dollar led to imports becoming very expensive. This further reduced the country’s production capability, leading to a further economic decline. A devalued currency makes a country’s exports cheaper than those of other countries. This has the potential of boosting the level of exports in countries with devalued currency thus reducing their balance of

Introduction: What factors affect the demand and supply of Australian dollars in the foreign exchange markets? Distinguish between the possible causes and effects of currency depreciation and a currency appreciation on the Australian economy. What forces have come into play, if any, in the past four months that have affected the value of the Australian dollar?

Australia’s dollar value changes every hour which can have a large impact or small impact on our economy and the world economy. The dollar Impacts businesses in Australia that play an important role in the exportation of goods and importation of raw materials Pettinger, T. (2013). If the Australian dollar was too depreciate it would make exports cheaper and imports into Australia more expensive. The impact of the depreciation of the Australian dollar matter upon the elasticity of demand, If firms sell goods that are price inelastic, then the fall in their foreign price will have a relatively small increase in demand. If exports are price sensitive, then there’s a bigger percentage increase in demand (Pettinger, T. 2013). A possible problem of a depreciation in the Australian dollar is that it may cause inflation. Firms could then face costs such as greater uncertainty in inflation does result. Both demand and inflation are major causes in the value and change of the Australian dollar.

The value of the dollar rising or falling to a country depends on market forces and economics in that country. The reasons why the dollar is rising or falling decides the desirability of the dollar rising or falling. When compared to another country's currency, it can determine whether it is an advantage or disadvantage to the country's economy. The reasons why the dollar is rising or falling can also determine a weak or strong economy and can affect the economy in good and bad ways.

India is one of the fastest economic growth countries in the world; it is also one of the world’s top ten economics. According to the global purchasing power parity data from the IMF, India is the third largest economy country of the world. As the US dollar to be the monetary unit, India is the seventh largest economy with high speed increase rate. Therefore, many economists forecasting that until 2050, India will become the No.3 largest economy country which just behind US and China. As the growth speed side, the GDP increase rate of India was 7.3% in 2014-2015 fiscal year, It is exceed China to become the fastest economic growth