Many are speculating that the world is soon to enter another "currency war" like the one that occurred during the Great Depression. But what is a currency war? We've discussed this idea in class before: countries try to devalue their currency so that they can improve trade abroad. With their dollar worth less, their goods also become relatively cheaper in the global market.
However there is much debate over whether or not this is occurring, and not surprisingly the debate is international. The Brazilian Finance Minister (who coined the term "currency war") claims said war is already happening, while US Treasury Secretary doesn't even acknowledge the problem.
Whether or not the war is real it should be noted that many treasuries are seeking drastic measures to improve their economies, such as cutting interest rates or printing money. While these may not be acts of war they do have a "domino" effect that raises the value of other currencies which isn't helping other countries.
More than attempting to hurt others by increasing the value of their currency, countries are trying to get out of a recession. They want to increase growth rates which can be done through exports and thus it seems like its a war against each other however it could be just each ones solution.
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