What is devaluation?

Devaluation is a decrease in the value of a currency relative to the value of gold or other currencies. In other words, devaluation is depreciation. Its main function is to make export goods (goods that go out of the country) cheaper and imports (goods that go into the country) more expensive. Devaluation is often used to stabilize the economy in a country. It is usually used in times of crisis when the country has a shortage of foreign exchange reserves.

What does the exchange rate depend on?

Now the currency is a commodity for which there is a separate market. Its participants are various banks, including central banks, as well as large companies. They also buy and sell currencies. Central banks have a great influence on the exchange rate.

The dependence of the exchange rate on supply and demand is enormous. But it is also worth considering the dependence on many other conditions, for example, fundamental ones, such as the state of the trade balance of a certain country.

The exchange rate is influenced by political and economic factors of the country. They can be both internal and external. Domestic economic factors include inflation, GDP, the state of the labor market, and the real estate market.

All this information is usually exposed at a certain time. Significant deviations of the data from the expected values ​​of economic indicators can lead to a sharp jump in the exchange rate.

On these grounds, central banks decide to change rates in a positive or negative direction. If economic indicators show positive dynamics, when rates rise, which is reflected in the strengthening of the national currency. In the case of a stable decrease in economic indicators, on the contrary, a decision is made to reduce rates, which, as a rule, leads to a weakening of the national currency.

Who benefits from the depreciation of the ruble?

Most of all, the depreciation of the ruble is beneficial to those who have expenses in rubles and revenue in foreign currency.

Import substitutes. Domestic producers will gain a competitive advantage as a result of higher prices for imported products. This category of producers will receive “power” over the devaluation for the growth of the country’s GDP.

The main important item is food. The food, light, and textile industries will receive the strongest impetus for growth. As well as the benefits will be received by domestic engineering products, which are actively being replaced by imports.

Exporters. In most cases, oil and gas producers. The export revenue in terms of rubles will grow, as well as the profit itself. This will be a positive trend for the economy, companies, and their employees, but a narrow choice of raw materials will not allow for an increase in production, and the impact of devaluation on GDP will not be as large.

Workers. People will get more jobs as well as higher wages. It is possible that they will also receive some benefits by increasing the budget if additional budget revenues from the devaluation are spent on the needs of the people.

What to do in a situation of devaluation?

The first thing to do is not to save money in piggy banks, but to put it at interest on a bank deposit. Also, divide savings into different currencies and precious metals. Buying real estate is a good way to invest capital.

insurance company,progressive insurance,farmers insurance,travel insurance,geico insurance,insurance,nationwide insurance,allstate insurance,cheap car insurance,health insurance,home owners insurance,state farm insurance,american family insurance,erie insurance,insurance quote,renters insurance,usaa insurance,aaa insurance,auto insurance,car insurance quotes,dental insurance,insurance quotes,life insurance,mercury insurance,pet insurance,progressive auto insurance,freeway insurance,homeowners insurance,insurance companies,root insurance,safeco insurance,auto insurance quotes,cheap auto insurance,infinity insurance,life insurance policies,national general insurance,nationwide pet insurance,the general insurance,auto owners insurance,cheap insurance,elephant insurance,geico car insurance,general insurance,home insurance,life insurance company,progressive insurance login,aetna insurance,dairyland insurance,delta dental insurance,farm bureau insurance,gap insurance,globe life insurance,hartford insurance,health insurance marketplace,liberty mutual insurance,life insurance quote,marketplace insurance,the general car insurance,usaa car insurance,acceptance insurance,amica insurance,car insurance companies,car insurance near me,cobra insurance,farmers insurance open,foremost insurance,insure vs ensure,lemonade insurance,medical insurance,progressive car insurance,shelter insurance,usaa auto insurance,aaa auto insurance,allianz travel insurance,business insurance,car insurance company,certification of insurance,combined insurance,direct auto insurance,geico auto insurance,geico insurance quote,geico renters insurance,gerber life insurance,insurance agency,insurance near me,kemper insurance,long term care insurance,medical insurances,progressive insurance quote,term life insurance,whole life insurance,aaa car insurance,alfa insurance,auto insurance company,cigna insurance,direct insurance,farmers insurance login,fred loya insurance,geico home insurance,grange insurance,hanover insurance,insurance companies near me,life insurance companies,life insurance quotes,mapfre insurance,motorcycle insurance,new york life insurance,progressive insurance phone number,pronto insurance,safety insurance,state farm auto insurance,statefarm insurance,the general auto insurance,adriana's insurance,affordable health insurance,aflac insurance,american national insurance,ameriprise insurance,assurant insurance,auto insurance companies,best car insurance,best pet insurance,california department of insurance,cheap health insurance,chubb insurance,commerce insurance,disability insurance,dog insurance,embrace pet insurance,geico insurance phone number,guardian dental insurance,hagerty insurance,health insurance companies,health insurance for individual,insurance agents near me,insurance auto auction,insurance marketplace,la insurance,liability insurance,life insurance for seniors,life insurance policy,metlife insurance,njm insurance,safeway insurance,