The change in exchange rates will have an important impact on the international income and expenditure of one country, the domestic economic and international economic relations.Generally speaking, countries with exchange rate changes have a greater impact on countries with open economy, higher degree of foreign dependence, and loose foreign exchange control. Countries with strict foreign exchange control and low degree of dependence have a small impact.This article, LTG GoldRock, will share with you the impact of exchange rate changes on the domestic economy of one country ~
The exchange rate changes have a direct and indirect impact on domestic prices, employment, resource allocation, and interest rates.
1. The impact of exchange rate changes on domestic prices
The direct impact of exchange rate changes on the domestic economy is concentrated on the impact of prices, and prices have an impact on other domestic development.
If a certain currency exchange rate falls or the currency depreciates, it will cause the price of imported goods and the price of commodities expressed by the local currency. The rise in the price of imported goods will directly cause the price of the domestic consumption of the country and the consumption of these products. If imported raw materialsThe rise in prices of intermediate products and machinery and equipment will cause the country's domestic production and use of these imported materials to increase the cost of non -trading products, which will also promote the rise in domestic non -trading products in the country.In addition, the decline in exchange rates will also cause exports to expand and reduce imports, exacerbate the contradiction between supply and demand in China, increase the overall price level of the country, increase inflation, and cause the country to deteriorate.In contrast, if the exchange rate of a certain currency rises or the currency appreciates, it will reduce the price level of the country in the country and slow down the country's inflation.
2. The impact of exchange rate changes on employment
If a certain currency exchange rate falls or the currency depreciates, it will bring the export of currency issuance countries to expand and reduce imports, and trade revenue and expenditure will improve.If the country still has idle production factors (including capital and raw materials such as labor, machines, etc.), the country's production volume will expand, and it can also drive the domestic economy and expand employment.The employment of export departments and competition departments with imports will increase with the expansion of exports and reduction of imports.
3. The impact of exchange rate changes on resource allocation
The decline of a certain currency exchange rate or depreciation of the currency will bring the number of exports of currency issuers to expand, thereby increasing the price of the local currency of export goods.At the same time, the rise in local currency prices of imported goods will also drive the price of the local currency of imported alternatives. The price of the entire trading department will increase compared to the non -trade sector.Trading department.In this way, the country's industrial structure has fallen to the trading department, thereby increasing the degree of opening up to the country, that is, more products compete with foreign products.
For developing countries, after the depreciation of the local currency, it is conducive to the improvement of the production efficiency of the import alternative industry.It is conducive to the export of agricultural products in developing countries, which will help improve the efficiency of resource allocation.
4. The impact of exchange rate changes on interest rates
Some kind of currency exchange rate falls or the depreciation of the currency will play a role in expanding the limit, thereby bringing increased exports and reducing imports of currency issuance countries, increasing foreign exchange reserves, and at the same timeEssenceConversely, a certain currency exchange rate increases or the appreciation of the currency will limit the expansion, thereby bringing reduction in exports of currency issuance countries, increasing imports, and decreased foreign exchange reserves. At the same time, the country's domestic currency supply will be reduced.Interest rates rose.
