Is Depreciation The Right Strategy To Promote Exte

IS DEPRECIATION THE RIGHT STRATEGY TO PROMOTE EXTERNAL reach OF BANGLADESH? Depreciation is the decline in a value of a currency based on market factors like severalise up and demand. When a nations currency depreciated sexual relation to former(a) currencies world expense translated them into higher toll in key out of depreciated currency. Depreciation and Devaluation are sometimes used interchangeably, and Devaluation means lower the value of nations currency through the irresponsible intervention. Depreciations impact in external hurdle of heaven of Bangladesh: External sectors reflect the Balance of Payments that is a figure of appointed estimates of all transactions between two countries during a year. It shows the gibe total of all external transactions arising from merchandise and event of goods and services and transfers, such as remittances and hood inflows and outflows (transactions on capital account). The purpose of both disparagement and devaluation is to cheapen the interior(prenominal) goods and approach increase up the exports. Devaluation or wear and tear of the exchange ordain piece of ass correct a balance of payment deficit because it lowers the price of exports in terms of strange currencies and raises the price of imports on the crustal plate market.

Export and import: Currency depreciation decreases the price of domestic product to the foreign importer and raises the price of foreign goods to the local importer. That is depreciation encourage high export and descend import which in turn positively impact on BOP. There is a traditional view that depreciation improves exports for substantial countries. But is it withal true for lest developing countries l! ike Bangladesh? ?In Bangladesh one of major(ip)(ip) source of exports is cloth industry, which includes knitwear and ready-made garments along with specialised textile products, is the nations number one export earner, score for 80% of Bangladeshs exports of .56 billion in 2009. And other major source is pharmaceutical industry. But these two major sectors...If you desire to get a full essay, order it on our website: OrderEssay.net

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