a A higher real exchange rate signifies a real depreciation of the local currency.

Devaluation of the currency.

Beggar Thy Currency Or Thy Self?

20. The national currency was devalued.

In Algeria, real depreciations appear to have been accompanied by constant real wages and falling labour productivity.

A Devaluation Option for Southern Europe

But there is a more fundamental point From an economic viewpoint, currency manipulation or unfair undervaluation are exceedingly hard to pin down conceptually. The renminbi's slight depreciation against the dollar in 2014 is not evidence of it many other currencies, most notably the yen and the euro, depreciated by far more last year.

When the dollar falls in value, as it has, Ukraine s very open economy imports inflation. In the last year, the dollar s value dropped by 12 against the euro, which is a more important currency than the dollar in Ukraine s foreign trade.

When the dollar falls in value, as it has, Ukraine s very open economy imports inflation. In the last year, the dollar s value dropped by 12 against the euro, which is a more important currency than the dollar in Ukraine s foreign trade.

Thus, trade liberalization in these countries was initially accompanied by real currency devaluations to avoid a sharp deterioration in the balance of payments.

These countries, too, are facing a recession, and, while the interest rate has not yet reached its zero bound everywhere, incentives to depreciate might grow in the near future. In fact, the incentives are already there.

MUNICH Because China has pegged its undervalued currency, the renminbi, to the dollar, every weakening of the dollar in the wake of America s financial crisis has also meant a weakening of the renminbi vis à vis other world currencies. But is China really to blame for the eruption of a global currency war?

depreciation of nonconvertible currencies.

One need not be an economist to figure out that, while all currencies can (and do) depreciate against something else (like gold, land, and other real assets), by definition they cannot all weaken against each other. In order for some currencies to depreciate, others must appreciate.

When this pattern is combined with the depreciation of the new Israeli shekel (NIS) in 2003 and then its appreciation in 2004, it is clear that while the Palestinian trade balance does not benefit from the depreciation of the Israeli currency, it suffers the full negative impact of currency appreciation.

15. The national currency has stabilized, depreciating by 1.5 per cent against the United States dollar in 1997, which resulted in a real appreciation of 3 per cent. Credit growth has been strong.

This reflected a decrease in real terms, due to inflation and the devaluation of the dollar.

The situation of some countries had worsened recently as a result of the devaluation of their currency.

This, in turn, resulted in substantial currency devaluations and required a sudden contraction of trade deficits.

Since then, many calls for coordination have lamented the outbreak of currency wars, otherwise known as competitive depreciation an old phenomenon that recalls the tit for tat devaluations of the 1930s. Now, as then, the fear is that if all countries try to depreciate their currency to gain export competitiveness and boost their economies, all will fail.

In fact, while the dollar depreciated during the last half of 2003, resulting in huge exchange gains in 2003, during the first five months of 2004, the dollar appreciated by 3 per cent against the euro and other major currencies.

This will be much helped by the large devaluations of their currencies during recent months.3

Some have accused Japan of fueling a global currency war. Anticipation of aggressive monetary expansion has sharply weakened the yen, which has fallen by almost 20 against the dollar in just over four months.

On the supply side, however, the currency devaluations of the major natural rubber producers, i.e., Indonesia, Malaysia and Thailand, may stimulate output since the devaluations have increased growers returns despite declines in dollar prices.

Poverty increased, the currency suffered repeated devaluations, foreign and domestic debt registered an increase and the growth rate of the economy fell.

In fact, while the US dollar depreciated during the last half of 2003 resulting in huge exchange gains in 2003, during the first five months of 2004, the US dollar appreciated by 3 per cent against the euro and other major currencies.

By my calculations, the dollar still needs to go down another 15 if the US trade deficit is to go back towards balance. Ideally, Asian currencies would rise much more than 15 while European currencies would rise less.

The nominal increase translated into a significant decline of actual resources available, primarily due to the impact of the depreciation of Usthe United States dollar against the secretariat's functional currency, the Euro.

In fact, currency devaluations were critical to ending the Great Depression. As Barry Eichengreen and Jeffrey Sachs demonstrated in 1984, while abandoning the gold standard had an immediate negative impact, it quickly spurred recovery, with the first countries to devalue their currencies escaping depression earlier than others.

As fiscal austerity and asymmetric adjustment have taken their toll on economic performance, monetary policy has borne the burden of supporting faltering growth via weaker currencies and higher net exports. But the resulting currency wars are partly a zero sum game If one currency is weaker, another currency must be stronger and if one country s trade balance improves, another s must worsen.

In export products, marketing boards have in the past extracted large surpluses, particularly during periods of international price booms and devaluations.

Finally, the renminbi s recent decline against the dollar was only 2.5 , from CN 6.2 to CN 6.35 far below the double digit declines of the Japanese yen, the euro, and the British pound. So, on an overall trade weighted basis, the renminbi is substantially higher relative to the currencies with which it competes.

Since the implementation of the new exchange reform, the previous appreciation state of RMB was changed. The central parity rate of RMB exchange rate in one year was about 8 .

This has forced the State to use local currency to finance Iraqi imports, thereby devaluing this currency outside Iraq and reducing its purchasing power.

Indeed, French President Nicolas Sarkozy s government just announced one. And concerns that a fiscal devaluation will conflict with euro rules can be met by simply pointing out that Germany s government carried one out in 2007, though by another name, when it raised VAT from 16 to 19 and cut employers contribution to social insurance, from 6.5 to 4.2 .

Of course, the renminbi s recent depreciation was much smaller than the de facto currency devaluations engineered by the United States and the United Kingdom after the financial crisis of 2008. It was also nowhere near as significant as the devaluation that the Bank of Japan has pursued since 2012.

The irony is that the euro has been a hugely successful project, bringing considerable stability to participating countries. Indeed, without the single currency, many of these countries would have succumbed to a downward spiral of devaluation, default, and recourse to the IMF.

CONTRIBUTIONS TO PRODUCTIVE AND REPRODUCTIVE

Virtually every instance of sustained high growth has been accompanied by a significantly depreciated real exchange rate. This is as true of South Korea and Taiwan in the 1960 s and 1970 s, as it is of Argentina today.

Many SMEs were unable to survive because of premature and sudden removal of protection and devaluation.

(c) As the balance of payments deteriorated, especially after interruptions of capital inflows and sometimes massive flights of capital, the national currency was sharply devalued.

Devaluation leads to a change in the relative prices of imports, which become dearer in the national currency, and exports, which become cheaper in foreign currencies.

The risk is that those countries that suffer from the switch retaliate and depreciate their own currencies. That could easily trigger a return to the much feared competitive depreciations that contributed to the Great Depression.

67. Downward adjustments of exchange rates or currency devaluations have considerably weakened the economies of the third world countries.

But fear not, claim advocates of unconventional monetary policy. What central banks cannot achieve with traditional tools can now be accomplished through the circuitous channels of wealth effects in asset markets or with the competitive edge gained from currency depreciation.