Oct 22 2009, 11:25 AM
QUOTE(maxchua @ Sep 15 2009, 03:28 PM)
I watched CNBC, and when the USD is dropping, some have the same arguement as you, saying that depreciating the USD will lower their budget deficit (which is sort of your point).
But some argued that a country cannot be prosperous with a weak currency.
What i am trying to say here is that, it is beneficial to those exporting companies but not to the economy as a whole if RM keeps on depreciating against other currencies.
The depreciating of USD won't lower the budget deficit as gov still spending the same amount of money. But some argued that a country cannot be prosperous with a weak currency.
What i am trying to say here is that, it is beneficial to those exporting companies but not to the economy as a whole if RM keeps on depreciating against other currencies.
I think you heard it wrongly, the depreciating of USD can lower the trade deficit, as export from US become cheaper which drive more export, while import item become more expensive for US people which will drive US people to source locally, or reduce their import.
Export business flourishing also can be beneficiary to the economy. Previously 1997 Asian crisis, Asian countries rely on this model (more export) to recover, but there is a limit of your currency depreciating continously as the depreciating become too severe and out of control, it means shatter the confidence on the particular currency eventually could trigger another problem.
Quote
0.0140sec
0.82
6 queries
GZIP Disabled