What Is Currency Devaluation?

Currency depreciation (also known as currency depreciation, foreign name Currency Devaluation) is the symmetry of currency appreciation, which refers to the decline in the value contained in or the value represented by the unit currency, that is, the decline in the price of the unit currency.

Currency devaluation

Currency devaluation (also known as currency devaluation)

Currency depreciation

1. The devaluation of the currency caused a rise in prices in the country. However, because currency depreciation can stimulate production under certain conditions and reduce the prices of domestic goods abroad, it is conducive to expanding exports and reducing imports. Therefore, after World War II, many countries took it as a counter-economic crisis and a stimulus to economic development Kind of means.

Zheng Xinli, executive vice-chairman of the China International Economic Exchange Center, said on January 14, 2013 that the devaluation of the US, European, and Japanese currencies may become the most prominent contradiction facing China's macro-control. In the future, China will not only keep domestic prices basically stable, but also keep the value of the Renminbi stable. This poses new challenges for macroeconomic regulation.

As the world s second-largest economy, it is difficult for China to avoid the negative effects of the flooding of global liquidity. Global currency oversupply may cause fluctuations in commodity prices, which may lead to global inflation risks and affect the stability of the global foreign exchange market.

To cope with global inflation risks, China still has a lot of room for macroeconomic regulation. It is necessary to promote the convergence of domestic production and demand to stabilize domestic market prices and avoid excessive domestic shocks caused by rising international commodity prices. At the same time, the appreciation of the yuan against the US dollar and other currencies must be appropriately controlled. If foreign currencies depreciate and China appreciates significantly, China's exports will be further affected if foreign exchange rates are not balanced.

China s official data released on the 10th showed that China s foreign trade import and export growth rate in 2012 was only 6.2%. If global liquidity is excessive and the world economy is in the cold winter, China will have to face more complex international trade risks.

One of the important advantages of China's exports is the price, and global inflation will push up the prices of raw materials and manufactured goods. At that time, China will be in a dilemma of "loose and not loose" monetary policy.