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Because countries dependent on non-value-added exports typically have serious issues with balancing a competitive exchange rate with inflation. Promoting the p
by Daishiman 6y ago
Because countries dependent on non-value-added exports typically have serious issues with balancing a competitive exchange rate with inflation.
Promoting the purchase of expensive foreign goods dries up the supple of foreign currency generally used as a reserve, which drives down the value of local currency, generates an inflationary spiral, and increases the cost of more vital industries to acquire foreign goods necessary for production.
Hence import taxes in a lot of these countries are used to prevent bank runs, inflation, and access to critical goods.
- 908B64B197 6y agoSounds like they should switch to a better currency.