The Importance of Currency Devaluation and its Effect on the Economy Assignment

The Importance of Currency Devaluation and its Effect on the Economy - assigning ExampleIt makes the countrys exports relatively cheaper to foreign countries. Devaluation makes the cost of living expenses to the countrys citizens as foreign products become expensive and, therefore, discourages imports. Food prices annex and become unaffordable to most people. Finally, it leads to an upsurge of foreign currency reserve and the exports become more than the imports.The Chavez administration took advantage of the devaluation of the bolivar. It increased its domestic monetary resources it gained from the sale of its rock oil exports. Upon the surge of devaluation, the Venezuelan regime received more bolivar for every dollar. It earned more from the sale of its oil exports and it, therefore, had enough money for domestic expenditureThe predicting analysts were correct. Venezuelas currency recently traded at approximately 80 percent less of the official and fixed exchange rate. The Venez uelan government has recently made some(prenominal) developments in its economy as it tries to ease the shortage of consumer goods and food, and make the dollar accessible. According to DolarToday.com, its new exchange rate stands at 64.74