Question

Does a devaluation help the economy?..​

Answer 1

Answer:

Here's your answer》》》》》》》

A devaluation (depreciation) occurs when the exchange rate falls in value. This causes exports to be cheaper and imports to be more expensive. In theory, it can help increase economic growth, though it may cause inflation.

Hope it helps youu......

Answer 2

Answer:

Hey!!!!!!!!!

let's provide you with advantages of devaluation so you can conclude it yourself...

Exports become cheaper and more competitive to foreign buyers. Therefore, this provides a boost for domestic demand and could lead to job creation in the export sector.

A higher level of exports should lead to an improvement in the current account deficit. This is important if the country has a large current account deficit due to a lack of competitiveness.

Higher exports and aggregate demand (AD) can lead to higher rates of economic growth.

Devaluation is a less damaging way to restore competitiveness than ‘internal devaluation‘. Internal devaluation relies on deflationary policies to reduce prices by reducing aggregate demand. Devaluation can restore competitiveness without reducing aggregate demand.

With a decision to devalue the currency, the Central Bank can cut interest rates as it no longer needs to ‘prop up’ the currency with high interest rates.