Rich Valuation

Finance allah shmoop What is devaluation steve Valuing a currency

i am making it less valuable can only happen when

the government which controls that currency decides to devalue it

So yeah it's a kind of their call when and

how much basically devaluation happens when a country decreases the

value of its currency against other currencies A lot of

times by just running the printing press all night printing

a whole bunch of their currency there's a whole lot

of supply on the market Well why on earth would

a country ever intentionally do this like devalue their currency

Well usually because it wants its goods to be less

expensive abroad like to be ableto export them more cheaply

to places like the u s and china and russia

by a lot of whatever's Well when a currency is

devalued the homegoods iii the home country goods are cheaper

in other markets This will usually lead to an overall

increase in exports for that country when it comes to

exports and imports though there's a kind of a union

ng ng anyway there's a counterbalance at play here imports

become mohr expensive and consumers at home likely shift away

From foreign teo purchase in country goods right it's kind

of protecting the country's own domestic product there Currency changes

Yeah well the result Yeah strengthened domestic product sales in

all of this might sound hunky dorey But while there

are some potentially nasty side effects local companies are getting

a bit of a break here which might make them

inefficient Slash lazy slash sloppy slash lacking in competitive spirit

to go fight it out in the global markets No

plus one of currency is devalued Each unit is worth

bless and that can lead to inflation which causes all

kinds Other problems down the line So that's just the

nutshell of devaluation making money not worthless But you know 00:01:57.019 --> [endTime] worth less