how can impact of appreciation of currency on exports be decreased

Expert Solution

In this regard their needs to be two countries for explanation where let us assume the two countries be united states and India and consider the United States dollar appreciated. Then what happens is that in order to get United States goods India should give more amount of their local currency to get one dollar as a result of which the goods become expensive for the Indian citizens as a result of which the demand less of United States goods and with this the United States have to reduce their exports on the whole

This can actually be reduced by understanding the consumer influences accordingly or opening of a market there directly so thatthe manufacturing of the business can be done in the local currency itself so that there would be no effect of appreciation of the currency with respect to another as a result of which this effect can be decreased in for instance when you are exporting a product and there is a currency appreciation in huge extent of the country, then you can just shift your business place to offset the effect

Rahul Sunny answered 2 years ago

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