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What are the benefits for a country of keeping its currency exchange rate low?

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Question ajoutée par Alex Al Yazouri , General Manager , Al Mushref Cooperative Society
Date de publication: 2014/12/20
Alex Al Yazouri
par Alex Al Yazouri , General Manager , Al Mushref Cooperative Society

To compete well in Exporting with other exporting nations.

Good percentage of those nations are keeping a low fixed exchange rate.

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
par VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

Countries prefer a fixed exchange rate regime for the purposes of export and trade. By controlling its domestic currency a country can – and will more often than not – keep its exchange rate low. This helps to support the competitiveness of its goods as they are sold abroad. FX fluctuations in other currencies can also have additional  arbitration advantage if properly dealt with.

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