The decline in the value of the currency makes the adjusting country’s goods more competitive internationally. With a lower-valued currency, imports are more expensive relative to domestically produced goods, which should lead to a substitution of domestically produced items for imports. At the same time, a lower-valued currency makes the adjusting country’s exports cheaper for its trading partners. This should lead them to purchase more of the country’s exports. Reducing imports and increasing exports can be an important channel for growth, especially for a country that is heavily involved in international trade. .
