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A country may choose to devalue its currency to make its exports cheaper and more competitive in the global market, which can boost economic growth and increase demand for its goods and services. Additionally, devaluing the currency can help reduce trade deficits and stimulate domestic production.

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5mo ago

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Why would a Country like to devalue its currency?

A country would want to change its currency value, so it would lessen its world wide debt, and that lots of migrants can come into their country


Why is exchanging currency necessary for international trade?

Manly because there is not always a balance of trade. When there is not a balance of trade someone must be paid. They would like to exchange the money that they receive for the money that is used in their own country. That is why exchanging currency is necessary.Answer 2Because if you are in country A selling to someone in country B, you want to be paid in your own currency. Country B's currency is useless to you, you cannot pay your suppliers or your employees in it.But, the buyer in country B only has country B's currency in his bank account.So one of you has to exchange country B's currency into country A's currency, then you are both happy.


What are the effect of dollarization in developing country?

since dollarization replaces country's currency, it will lead to depreciation of local currency. Investors wont find it worth investing in a country with falling local currency as it will fetch them no good return. Also, it will affect our export. Import would be expensive.


What is an exchange rate used for?

An exchange rate if the value of currency of one country compared to that of Another Country. For example, it would be the value of a US Dollar measured by the value of Mexican Pesos.


What is a bank that overprints currency?

Normal banks cannot print currency of their own. Only the government can do so. Also, governments are very cautious about printing new currency because overprinting can have catastrophic effects on the nations economy. Hence almost all country's try to print only as much extra currency as the country would need.

Related Questions

Why would a Country like to devalue its currency?

A country would want to change its currency value, so it would lessen its world wide debt, and that lots of migrants can come into their country


How would you put devalue in a sentence?

Because of the economic situation, the government decided to devalue their currency.


What would happen if Spain left the euro?

They would again be able to devalue their own currency, a capability they do not have with the euro. This would let them better control their own economy.


What is a foreign currency?

A currency from a country in which you don't reside. For instance, to an American, a peso would be considered foreign currency. To a Mexican, a penny would be considered foreign currency.


What is the effect if the cause is congress printed more currency?

If Congress printed more currency, the immediate effect would be an increase in the money supply. This could lead to inflation as there would be more money chasing the same amount of goods and services. Additionally, it could potentially devalue the currency and erode purchasing power.


Why is exchanging currency necessary for international trade?

Manly because there is not always a balance of trade. When there is not a balance of trade someone must be paid. They would like to exchange the money that they receive for the money that is used in their own country. That is why exchanging currency is necessary.Answer 2Because if you are in country A selling to someone in country B, you want to be paid in your own currency. Country B's currency is useless to you, you cannot pay your suppliers or your employees in it.But, the buyer in country B only has country B's currency in his bank account.So one of you has to exchange country B's currency into country A's currency, then you are both happy.


Why would a person need to buy foreign currency?

If you are travelling to a country that has a different currency than your own, then it is a good idea to get some money transferred into the currency of the country you are travelling to so that you are able to buy things there.


What currency you should carry?

A rather vague question. I would recommend carrying the currency which is currently in use in your country of residence.


Why shouldn eurobe used in every country of the world?

If all the countries did use the euro, then it would be easy, there were no need to exchange your currency , there would not be so much fall in the value of the currency, one currency will not suffer.


What are the effect of dollarization in developing country?

since dollarization replaces country's currency, it will lead to depreciation of local currency. Investors wont find it worth investing in a country with falling local currency as it will fetch them no good return. Also, it will affect our export. Import would be expensive.


Is the 1000 bill legal tender?

That would depend on what currency (country) the 1000 bill was for.


How do you find a correspondent bank of all foreign banks?

One would look for a bank that is native to the currency that he/she is wanting to bank with. Often the bank will be located in a country where the currency is the usual currency.