A critical adjustment in the value of a country's currency, devaluation can help rectify issues of overvaluation, uncompetitive exports, or an adverse balance of trade, amid the backdrop of a fixed exchange rate system.
Dollar drain refers to the amount by which a foreign country's imports from the United States exceed its exports to the United States, leading to a depletion of the country's dollar reserves.
In economics, the J-Curve illustrates the expected turnaround in an activity, such as foreign trade, where the initial deterioration is followed by a significant improvement.
An overvalued currency is a currency whose value is artificially higher than its market value due to governmental support or intervention. This misalignment can impact a country's trade balance, economic stability, and competitiveness.
The trade balance, also known as the balance of trade, measures the difference in value between a country's imports and exports over a specific period. It is a critical indicator of economic health and international competitiveness.
An unfavorable balance of trade, also known as a trade deficit, occurs when the value of a country's imports exceeds the value of its exports. It indicates that a country is purchasing more goods and services from other nations than it is selling abroad.
