Competition and war between currencies) What is the secret behind the desire for a weak currency? . In fact, many countries prefer strong currencies during periods of economic expansion, where strong currencies allow increased purchasing power of citizens. A strong currency can lead to a higher quality of life. It also helps in controlling inflation Although the currency is weak but has its own benefits - at least from the point of view of countries that favor that theory. When a country's currency is weaker than its currency counterparts, its exports are cheaper and more attractive. Perhaps Japan is one of the countries that is known for its desire to keep its currency relatively weak. For their desire to keep the price of their exports lower and then accept people in other countries to buy their products. The same is true of China, a country that favors a weak value for the yuan relative to the US dollar, simply because more Americans want to buy cheap Chinese products. With lower export prices, a country can sell more goods to other countries. This, in turn, can promote and create jobs where weak-currency countries are forced to produce more goods to meet the growing demand for their cheap products. This situation can also promote economic growth. The devaluation of the currency could push economic growth forward and that is why many countries are concerned about the weaker currency during periods of economic recession Problems caused by currency wars While some believe that currency weakness can be useful in times of economic recession, others suggest that problems with currency wars can in turn lead to more problems. Many countries may resort to devaluation at the same time and this is one of the biggest issues that can actually lead to some kind of instability. When everyone tries to have the upper hand by maneuvering the currency, this will make the global market economy increasingly unstable. Ultimately, it can discourage investment and commercial reality, which actually limits growth rather than encouraging it Many people saw that the biggest threat posed by currency wars was the large scale of economic inflation on a large scale. When money supply increases, when currencies are devalued, prices rise. The purchasing power of the currency is reduced and what you can buy in one unit of currency is much less than it was. The purchasing power of the citizen is lower. Inflation is desirable, to some extent, by the secondary product of economic growth. But big inflation would stifle economic growth and eliminate middle-class savings. When this happens, it makes the whole system unstable, and can lead to economic collapse. Some fear that currency war, especially in the world economy, which has become a very integrated system, can lead to widespread inflation and thus a serious problem for the entire system. A comprehensive currency war can lead to a number of problems related to the global economy and lead to insufficient economic stimulus for any country
كاتب المقالة
writer and blogger, founder of aslande .

جديد قسم :