the power of any economy is governed by several determinants, including the value and stability of currency, the interest rates, and the overall structure of the monetary policy.
however, the value of currency is very vulnerable to political circumstances, as we see in Turkey, but how can the economy observe such shock and what is the impact of the currency on the economic development?
Impact of devaluation of currency on economic development:
1. Exports become cheaper then more demand for exports.
2. Imports become more expensive then less demand for imports.
3. Agregate Demands increase because of (X-M) then higher economic growth.
4. Inflation is likely to occur.
5. Improvements of the current account deficit.
Thanks Marjan Naseri and Milan Branko Vemić
for your contribution