Currency wars occur when countries deliberately devalue their currencies to gain a competitive advantage in international trade and boost exports. There have been several periods of currency wars throughout history. Most notably in the 1930s during the Great Depression when countries abandoned the gold standard and pursued policies of competitive devaluation, dubbed "beggar thy neighbor". More recently, after the 2008 financial crisis, export-focused countries like China devalued their currencies, which led other nations like the US and UK to also devalue their currencies to remain competitive in export markets. Currently, the European Central Bank has launched a large quantitative easing program while China and other Asian countries have also devalued currencies, risking another wave of global currency wars.

1. GROUP NO.6
JANAKI RANI D-60
MONIKA LOHIA D-54
P.SRINATH B-03

3. WHAT IS CURRENCY WAR???
 Currency war” - term coined by Guido Mantega,
the finance minister of Brazil, 2010.
 Manipulation of currencies to boost exports.
 Also known as competitive devaluation.

4. MECHANISM OF DEVALUATION
 Control over exchange rates
 Selling own currency to buy foreign currency
 Quantitative easing

5. HISTORICAL OVERVIEW
 During the Great Depression of the 1930s, most
countries abandoned the gold standard.
 "beggar thy neighbour “
 Negative impact on international trade
 The currency wars of the 1930s ended with
the Tripartite Agreement in September 1936,
stabilizing exchange rates .

6. AFTER GREAT RECESSION OF 2008…
 Sharp decline in world trade.
 Export led strategy for growth.
 Export based countries such as China and South
Korea devalued their currencies to export more
commodities to the global market.
 US and UK introduced monetary policies to devalue
their currencies in order to compete in the export
market.

7. PRESENT DAY…
 A €60bn per month quantitative easing programme
was launched in January 2015 by the European
Central Bank.
 China has recently devalued “Yuan” in august
2015,due to weakening export.
 This resulted in further devaluation by Asian
currencies like, Vietnam dong and the Kazakhstan
tenge.

8. REASONS FOR CURRENCY WAR
 Trade disputes between countries
 Currency Volatility
 Trade Protectionism

9. ADVANTAGES
 Boost in exports
 Employment
 Demand and consumptions

10. DISADVANTAGES
 Impact on productivity
 Rising inflation and capital outflows.
 Trade barriers

11. WHY WOULD WE NEED DEVALUATION ??
 Export growth
 Rising inflation
 Relief for debtors

13. ANY QUERIES ???

14. THANK YOU!!!