Devaluation: refers to the decrease in the amount of domestic unit currency exchanged for other unit currencies. It is commonly understood that the original 1 yuan was changed to 10 yuan, and now 1 yuan is changed to 5 yuan, indicating depreciation.
Depreciation refers to foreign exchange, and domestic inflation is one of the factors that cause depreciation.
How did it lead to Thailand's economic collapse?
Under the persistent high inflation, the national economy has declined, leading to the decline of international financial credibility. At this time, financiers began to withdraw their investment in Thailand, that is, to leave with money. This aggravated the economic recession and worsened it. Saving the economy needs money. Look at the current financial crisis. Money is used to stimulate the economy. If Thailand has no money, the economy will slowly collapse.
By the way, do financial investors depress the foreign exchange of Thai baht to devalue it, in order to buy assets cheaply when Thailand's domestic economy collapses and sell them for profit when the economic price returns to a reasonable price? Yes, I bought it at a low price and sold it after returning to a reasonable price.
Is planning economic crisis the sole purpose of all international financial predators? The profit is certain, but there are usually political reasons behind it.
How does foreign exchange depreciation affect the real economy?
Because the cost of goods produced by a country is calculated according to its own currency, the cost of goods must be related to the exchange rate if they want to compete in the international market. The exchange rate will directly affect the cost and price of the commodity in the international market and the international competitiveness of the commodity.
For example, a commodity with a value of 100 RMB is priced at 12. 12 USD in the international market if the exchange rate of USD against RMB is 8.25. If the exchange rate of the US dollar rises to 8.50, that is, if the US dollar appreciates and the RMB depreciates, you can buy this commodity with less US dollars, then the price of this commodity in the international market will become lower. If the price of a commodity decreases and its competitiveness becomes stronger, it will sell well, thus promoting the export of the commodity. On the other hand, if the exchange rate of the US dollar falls to 8.00, that is to say, the depreciation of the US dollar and the appreciation of the RMB will definitely benefit American exports. Similarly, the appreciation of the US dollar and the depreciation of the RMB are beneficial to China's exports to the United States. Conversely, the depreciation of the US dollar and the appreciation of the RMB will greatly stimulate the export of American goods to China.
1. Exchange rate and import and export Generally speaking, the decline of the local currency exchange rate, that is, the depreciation of the local currency, can promote exports and curb imports; If the exchange rate of local currency rises, that is, the ratio of local currency to the outside world rises, which is beneficial to imports and unfavorable to exports.
2. Exchange rate and price From the perspective of imported consumer goods and raw materials, the decline in exchange rate will cause the domestic price of imported goods to rise. As for the impact on the overall price index, it depends on the proportion of imported goods and raw materials in the gross national product. On the other hand, if the local currency appreciates and other conditions remain unchanged, the price of imported goods may decrease, which can play a role in restraining the overall price level.
3. The conversion of exchange rate and capital outflow into short-term capital flow is often greatly influenced by exchange rate. When the local currency depreciates, domestic investors and foreign investors are unwilling to hold various financial assets denominated in local currency, and will convert them into foreign exchange, leading to capital outflow. At the same time, due to the continuous exchange of foreign exchange, the shortage of foreign exchange supply and demand will be aggravated, and the local currency exchange rate will be further lowered. On the other hand, when there is a trend of appreciation of local currency abroad, domestic investors and foreign investors try to hold various financial assets denominated in local currency, which will lead to capital inflows. At the same time, since foreign exchange has been converted into local currency, the oversupply of foreign exchange will further promote the exchange rate of local currency.
Be natural, SEWEN
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