What is devaluation?If we mentioned the economic theory, in particular, macroeconomic in the previous articles, would be illogical to switch to other subject and proceeding from it, I thought what would be quite good if I answered a question of what is devaluation. As I live in Russia, we will speak about devaluation of ruble if you the resident of Ukraine or Belarus, then value of the term is analogous also in relation to national currencies of your countries.
Concept of devaluation: definition, value, an essence
is understood depreciation of this currency concerning currencies of other countries As devaluation of currency of one country (the return process is called revaluation). For example, if we speak about ruble, then it is logical to compare ruble exchange rate in its ratio to dollar and euro. What is characteristic, unlike such process as inflation (that is depreciation of currency within one state) devaluation can be defined by policy of the Bank of Russia (that is the Central Bank). But here it is important to understand what exists not only open devaluation at which the Central Bank counts on converting (exchange) or withdrawal from turnover of the operating currency, purchase or sale of the corresponding currencies, but also hidden - that that is not regulated by the Central Bank directly, but which reflects depreciation of ruble exchange rate concerning foreign currencies. “The basket of currencies“ to which ruble exchange rate is attached for 55% consists of dollars and 45% from euro and in case of a ruble exchange rate exit for a framework of “a currency corridor“, the Central Bank begins to undertake measures for control of a course by purchase or sale of currencies.
of the Reason
From the main reasons leading to devaluation of exchange rate should be allocated:
the Negative balance of payments between the countries displaced in sides of the foreign states
of the Consequence
is unambiguous to estimate devaluation of national currency only as negative process it would be incorrect. At this process everything is there are positive sides. For example, at devaluation demand for goods of a domestic production grows, the expenditure of gold and foreign exchange reserves decreases and the export devaluation income - from the fact that income is gained in foreign currency is formed. But, of course, all these pluses are incomparable with negative consequences, namely:
Acceleration of rates of inflation - producers increase the prices in domestic market
Use of other currencies as the tool for saving of money, depreciation of deposits in national currency, decrease in trust to ruble as to a financial instrument
Decrease in deliveries of import goods as the prices of them grew, and it negatively affects development of the companies which need the foreign equipment for ensuring stable existence
Falling of consumer ability of the population, that is the real income of the population (demand recession) are reduced.
Examples of devaluation can serve in national history:
Monetary reform of 1961 during which there was an exchange of old signs on new in a proportion 10 to 1, but with increase in gold maintenance of ruble and a change of course ruble - dollar in smaller proportions and as a result - the ruble is devaluated more, than twice
the Devaluation of ruble which was the result of an economic crisis in 1998.
the Devaluation of 2008 which is carried out for the purpose of ensuring more acceptable international balance and stimulation of inflow of the capital from - for a boundary of the country. telling
To the word, the effect of devaluation of 2008 is swept well up on graphics of dynamics of dollar rate concerning ruble (then the ruble exchange rate against a dual currency basket fell in price almost by 40%) by
of ru/chto - takoe - devalvaciya /