The devaluation of the ruble, which affects it

Initially, the term "devaluation" was strongly tied to gold, the less was the link of the country's monetary unit to this metal, the more devaluation became. The devaluation of the ruble is not an exception in this concept. In our time, this term is applicable when the country's money is losing its purchasing power strongly against hard currencies, to which the euro and the US dollar are to be attributed. If you listen to some tips, you can improve your financial situation.

Reducing the purchasing power of your savings. This will be a devaluation. Devaluation is a more capacious concept than inflation. It deals with the relationship of a monetary unit with other currencies. These processes do not belong to the same territory, they determine the exchange value of different currencies. With trade deterioration of the balance of the country, developing inflation, devaluation may occur. In some cases, devaluation helps governments to regulate the value of the national currency. This became possible when the gold cash equivalent was canceled. It occurs not only as a result of macroeconomic indicators, but also is regulated by government agencies. So officially reduce the rate of money: the national currency is simply not supported in interbank trades, the rate is not tied to the currencies of other countries and so on.

What is the devaluation of the ruble? By bringing this tool into action, it is possible to stimulate imports, the country's currency will fall in price and, as a consequence, will be in demand on foreign markets. This increases the balance of payments, there is an increase in exports, there are new jobs. The balance of payments of the state is improving. The import decreases. Produced goods become more competitive.

There are two types of devaluation: hidden and open. Open is when the government officially informs about it. Discounted money is being recovered. They are withdrawn from the interbank circulation, they are exchanged for new ones. Only at an undervalued rate, the percentage of devaluation is taken into account.

Hidden - lowers the cost of currency in relation to hard currencies, but old money is not withdrawn from circulation. With open devaluation, there is a decrease in prices for goods in relation to hard currencies. Concealed, on the contrary, increases their cost

Now, what is the devaluation of the currency, we know, it also carries negative phenomena, especially if not controlled. The devaluation of the ruble and its side effects are expressed in this form:

- is a provocateur of inflation and increases its growth rates. Production produced in the country is cheaper and it is necessary to increase the growth rates of production;

- the population loses confidence in the national currency;

- there is a decrease in the receipt of imported products. It increases in price. This will seriously affect the enterprises of the country and the entire population. Especially it will affect manufacturers who purchase foreign technologies and components for their production;

- the population begins to uncontrollably withdraw their savings in banks and buy up currency. This further increases its value;

- there is a reduction in wages and pensions, the purchasing power is significantly reduced .

Devaluation in Belarus has shown an example of an uncontrolled situation. Although for the economy, controlled devaluation sometimes benefits. The devaluation of the ruble in Russia took place in 1998 and many lost their savings. Follow the exchange rate and draw conclusions.