Why low currency value is bad?
In: 1
If you buy more than you sell, it’s bad, because you have to pay more money.
If you sell more than you buy, it’s good, because you can sell cheaper and therefore more.
It’s bad if you are at a net trade deficit, because you have to import more than you export, and the net difference has to be covered with more of your own currency when it is worth less.
It’s good if you are at a net trade surplus, because you have to import less than you export, and the net difference gets covered with more of foreign currencies, which are worth less and trade to more of your local currency. Your offerings are cheaper to the world market than those of other countries.
Note: Tourism counts towards exports, mostly.
Latest Answers