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Seems to me that the real driver of currency devaluation is the price of oil. By devaluing you protect your economy from big shocks because the price of oil sta
by memracom 11y ago
Seems to me that the real driver of currency devaluation is the price of oil. By devaluing you protect your economy from big shocks because the price of oil stays unchanged, in the local currency. Russia did the same and has managed to maintain an economic boom in manufacturing, new industry, and hight tech military hardware.
You can't pay attention only to numbers. You have to factor in culture, and a culture of hard work and innovation will beat the numbers every time. Not saying that they might not suffer a bit, but lets not forget that economy is a cyclic thing. What goes down will come up before too long because very smart people are hedging against all possibilities.
- nl 11y agoBy devaluing you protect your economy from big shocks because the price of oil stays unchanged, in the local currency. Russia did the same and has managed to maintain an economic boom in manufacturing, new industry, and hight tech military hardware. That doesn't make sense. The oil price is denominated in US dollars, so by devaluing you push it up. It's true that the price of oil is dropping too, but in the case of China they don't have domestic reserves so that doesn't matter. IN the case of Russia they are in a pretty severe recession: http://www.reuters.com/article/us-russia-economy-idUSKBN0U70ZO20151224 http://www.reuters.com/article/us-russia-economy-idUSKBN0U70...