Does devaluation increase exports?

Yes, devaluation helps in boosting exports because the goods become relatively cheaper for foreign consumers as the value of domestic currency goes down when compared to foreign currency. Devaluation helps in reducing the trade deficit. You can read about the Balance of Payment Crisis, 1991 – Causes and Measures to Control it in the given link.

Devaluation will discourage imports as the imported goods will become costlier for domestic consumers.

Further readings:

  1. Forex Reserves – Meaning, Importance, Advantages (Notes for UPSC IAS exam)
  2. New Economic Policy of 1991 – Objectives, Liberalisation, Privatisation, Globalisation

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