Who is affected negatively when a country's currency is strong? Give domestic and foreign examples

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Alicia Cardenas

1 December, 09:44

Who is affected negatively when a country's currency is strong? Give domestic and foreign examples

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Aubree Poole · Answer 1

When the currency of a country is very strong, it has negative impact on the economy of the country increasing trade deficit and it has a huge impact on the imports and exports of that country.

Explanation:

Appreciation of the currency leads to fall of exports of that country because the citizens of other countries have to pay more and there is an increase in imports of goods from other countries because importing goods from other countries fall cheaper for local people.

For example when U. S. dollar appreciates it becomes tough for Indians to import goods from U. S. but it becomes easier for the U. S. citizens to import goods from India.