The Devaluation And Depreciations Of Australian Dollar Against Us Dollar

1632 WordsMar 24, 20157 Pages
This article is mainly focus on the devaluation and depreciations of Australian dollar against US dollar, euro, pound and yen comparing in terms of floating exchange rate. The phenomena behind fixed exchange rate and floating rate is; fixed exchange rate is a rate that is set or fixed by the government or central bank to maintain its currency against gold or another major currency such US dollar or the currency basket. In fixed exchange rate, the country’s central bank or other concerns will maintain exchange rate by buying and selling its own currency on foreign exchange. The article was focusing on successful parties and defeated parties due to Australian dollar fluctuations. The effect of depreciation and devaluation of currency is mixed on whole economy, as if exporters are in good place but if they are relaying on imported machinery, fuel, fertilizers and other imported inputs, so falling Australian dollar will raise the cost of these products. Same goes with people travelling to their home land at Christmas time or travelling in holidays they find it feasible to convert the currency rather than wait for Australian dollar to grow. The reasons that depreciates Australian dollar are as follows, though in the article main focus was on interest rates and inflation but the discussion will not be completed if under the carpet factors are not discussed: a. Inflation Inflation means value for money is decreasing, the prices of goods are increasing so people prefer to buy goods

More about The Devaluation And Depreciations Of Australian Dollar Against Us Dollar

Open Document