Category: Weak Currency

Pros and Cons of a Weak Currency

A weak currency may help a country’s exports gain market share when its goods are less expensive compared to goods priced in stronger currencies. The increase in sales may boost economic growth and jobs while increasing profits for companies conducting business in foreign markets. For example, when purchasing American-made items becomes less expensive...
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Supply and Demand in Weak Currencies

Like most assets, a currency is ruled by supply and demand. When the demand for something goes up, so does the price. If most people convert their currencies into yen, the price of yen goes up, and yen becomes a strong currency. Because more dollars are needed to buy...
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Examples of Weak Currencies

Currencies can also be weakened by domestic and international interventions. For example, China’s devaluation of the yuan in 2015 followed a long period of strengthening. Moreover, the imposition of sanctions can have an immediate effect on a country’s currency. As recently as 2018, sanctions weakened the Russian ruble, but the real...
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Understanding a Weak Currency

Fundamentally weak currencies often share some common traits. This can include a high rate of inflation, chronic current account and budget deficits, and sluggish economic growth. Nations with weak currencies may also have much higher levels of imports compared to exports, resulting in more supply than demand for such currencies on international foreign exchange markets—if they...
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What Is a Weak Currency?

A weak currency refers to a nation’s money that has seen its value decrease in comparison to other currencies. Weak currencies are often thought to be those of nations with poor economic fundamentals or systems of governance. A weak currency may also be encouraged by a country seeking to boost...
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