how does money lose value?

Question

can somebody explain to me why sanction against a country causes its money’s value to drop. let’s assume this country is self-sustained (no import required) then does int’l exchange rate even matter? and if this country is a major exporter of oil, how does oil price drop affect its int’l exchange rate?

In: 1

Answer 1

People decide they want something else more than they want that money. They exchange that money for gold or other money or whatever. If enough people do that, the value of that money decreases.