Question

discuss why some countries wantcto decrease their currency rate , with examples?

Answer 1

When a nation's governing authority reduces the value of their nation's currency rate in order to devalue their exchange rate value.

This process is called Devaluation. It is the deliberate reduction in the value of a country's currency in terms of a common currency standard (say Dollars). Devaluation is often done by nations that follow a fixed exchange rate system, where the currency rate is often fixed by the country's governing authority rather than being determined by market forces such as demand and supply.  

Devaluation is often done to combat trade imbalances. Devaluation reduces the cost of exports, hence making domestic goods much cheaper in international markets. This thus increases export trade and export demand for domestic goods in foreign markets. Also , devaluation makes foreign goods much expensive in domestic markets, hence increasing the demand for domestic goods in domestic markets and contributes in reducing import from foreign sectors. This helps nations to reduce their deficits due to increased demand for domestic export goods in foreign markets.

Example: China has always been practicing devaluation as an attempt to make itself have a more strong stance in the global trade market. As a result , President Donald Trump imposed  tariffs on cheaper Chinese goods partly in response to the country's position on its currency , thus leading to a trade war.

India has also devalued its currency in order to increase its export demand and to reduce trade imbalances and trade deficits. This is an effort to the nation's ' Make in India' movement, where the nation aims to increase its export demand and improve its domestic productivity.