Co-Authored By:
Furthermore, does devaluation help the economy?
Advantages of devaluation Exports become cheaper and more competitive to foreignbuyers. Higher exports and aggregate demand (AD) can lead to higherrates of economic growth. Devaluation is a lessdamaging way to restore competitiveness than 'internaldevaluation'.
Additionally, how does devaluation affect the economy?
Exports cheaper. A devaluation of the exchange rate will makeexports more competitive and appear cheaper to foreigners. Thiswill increase demand for exports. Also, after a devaluation,UK assets become more attractive; for example, a devaluationin the Pound can make UK property appear cheaper toforeigners.
India devalued Rupee for the first time in 1966.Devaluation of Indian Rupee in 1966 despite governmentattempts to obtain a positive trade balance, India suffereda severe balance of payments deficits since the 1950s. Because ofall these reasons, Government of India devalued Rupee by36.5% against Dollar.