Devaluation aims to facilitate imports (make them cheaper) and directs investments abroad. True or False? Why?

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Tamer Elbeshbishy
19-May-2016

International Investments International Trade Banking International Finance Import

Question added by Nadjib RABAHI , Freelancer , My own account
Date Posted: 2016/08/25

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3 Answers

by Meklit Bekele , Assistant Manager Trade Finance Department , United Bank S.Co.

False.

It is the opposite, it is used to facilitate export. On the other hand the cost of goods imported increases.

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by Reji George , Business Development Consultant , Al Rais Group Of Companies

False. De-evaluation only leads to decrease in imports and increase in exports. Inflation rates are likely to go high too. It certainly has a positive impact on the economic growth. Manufacturers may find it difficult to adhere to their quality. Wages also seem to be less attractive for foreign workers.

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