{"id":27960,"date":"2018-10-23T17:20:18","date_gmt":"2018-10-23T11:50:18","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=27960"},"modified":"2018-10-23T17:20:18","modified_gmt":"2018-10-23T11:50:18","slug":"wars-of-the-currency-kind","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/wars-of-the-currency-kind\/","title":{"rendered":"Wars of the currency kind"},"content":{"rendered":"<p><a href=\"https:\/\/www.thehindu.com\/business\/Industry\/wars-of-the-currency-kind\/article24671808.ece\">Wars of the currency kind<\/a><\/p>\n<p><strong><u>News:<\/u><\/strong><\/p>\n<ol>\n<li>Recently, RBI Governor Urjit Patel warned that the global trade war could escalate into a currency war.<\/li>\n<\/ol>\n<p><strong><u>Important facts:<\/u><\/strong><\/p>\n<p>2. Trade wars erupt when countries impose tit-for-tat tariffs on imported goods, to protect domestic manufacturers.<\/p>\n<p><strong><u>3. Currency wars: <\/u><\/strong><\/p>\n<ul>\n<li>Currency wars are triggered when nations either allow their currencies to weaken appreciably or devalue them to gain a competitive advantage over trade rivals.<\/li>\n<li>If other countries react by devaluing their respective currencies to retain competitiveness, this could lead to instability in markets.<\/li>\n<\/ul>\n<p><strong><u>4. Devaluation: <\/u><\/strong><\/p>\n<ul>\n<li>Devaluation is a policy tool to reduce the value of a currency, relative to other currencies, in a fixed exchange rate.<\/li>\n<li>\u00a0It is used to set the relative prices of domestic and international goods and services at a new footing.<\/li>\n<li>\u00a0Devaluation is different from depreciation, which is a decrease in the currency\u2019s value due to market forces of demand and supply when the exchange rate of the currency is floating.<\/li>\n<li><u>Governments may resort to devaluation for any one of three major reasons: <\/u><\/li>\n<\/ul>\n<p><u>5. To boost exports:<\/u><\/p>\n<ul>\n<li>The lowered value of the domestic currency will make it less expensive for foreign buyers to obtain the local currency to buy locally produced goods or services.<\/li>\n<li>More goods and services would be sold abroad, helping domestic businesses reliant on export markets such as software services companies, pharma firms and seafood exporters.<\/li>\n<\/ul>\n<p><u>6. To shrink a trade deficit:<\/u><\/p>\n<ul>\n<li>Devaluation while making exports more competitive also makes imports more expensive and hence less affordable.<\/li>\n<li>This helps reduce the volume of non-essential imports thus helping to narrow the trade gap.<\/li>\n<\/ul>\n<p><u>7. To reduce the debt servicing burden: <\/u>nations with significant sovereign debt sold domestically may find it advantageous to let the currency weaken as it helps lower the notional cost of debt servicing.<\/p>\n<p><u>8. Rupee devaluation: <\/u><\/p>\n<ul>\n<li>In 1966, hit by drought after two major wars (with China and Pakistan), India devalued the rupee by 36.5%.<\/li>\n<li>Again, in 1991, a Balance of Payments crisis exacerbated by the sharp spike in oil prices in the wake of the Gulf War spurred India to devalue the rupee in \u201ca two-step downward adjustment of 18-19%.\u201d<\/li>\n<\/ul>\n<p><a href=\"http:\/\/blog.forumias.com\/must-read-news-articles-august-13-2018\/Exclusionary%20state\">Exclusionary state<\/a><\/p>\n<p>Article:<\/p>\n<ol>\n<li>Akriti Bhatia, PhD Scholar, University of Delhi, emphasized that rural-to-urban\u00a0migrant workers are facing dislocation and crisis of identity.<\/li>\n<\/ol>\n<p>Important facts:<\/p>\n<ol start=\"2\">\n<li>In India inter-state migrants are facing constant threat.<\/li>\n<li>Large chunk of migrant labourers shelter and work are deemed \u201cillegal\u201d within<\/li>\n<\/ol>\n<p>Indian cities.<\/p>\n<ol start=\"4\">\n<li>The 2011 Census pegs the total number of internal migrants in the country\u00a0including those who have moved within and across States, at a staggering 139\u00a0million.<\/li>\n<\/ol>\n<ol start=\"5\">\n<li>The author said , it is the responsibility of state to provide migrant workers with\u00a0proper documents, secure jobs, housing and provisioning of other public utilities.<\/li>\n<\/ol>\n<ol start=\"6\">\n<li>However, the state often derecognises them and conveniently brackets them as\u00a0\u201cillegal\u201d.<\/li>\n<\/ol>\n<ol start=\"7\">\n<li>The Smart Cities Mission of 2015 proposed investment allocations to convert 99\u00a0Indian cities into smart cities.<\/li>\n<\/ol>\n<ol start=\"8\">\n<li>A mere 8% of the intended projects have been completed so far in the past three\u00a0years, according to the recent report released by Housing and Land Rights\u00a0Network.<\/li>\n<\/ol>\n<ol start=\"9\">\n<li>Many smart city proposals identify slums as a \u201cthreat\u201d to the city in their \u201cSWOT\u201d\u00a0(Strengths, Weaknesses, Opportunities, and Threats) analysis while totally failing\u00a0to account for migrant labour in the schemes.<\/li>\n<\/ol>\n<ol start=\"10\">\n<li>The report documents forced evictions and shelter demolitions in 32 out of the\u00a099 proposed smart cities so far.<\/li>\n<\/ol>\n<ol start=\"11\">\n<li>The national obsession with bringing order to international boundaries could also\u00a0be applied within nation states, cities and neighbourhoods<\/li>\n<\/ol>\n<ol start=\"12\">\n<li>The author suggests that the state\u2019s role in ensuring equality, basic dignity,\u00a0livelihood and providing minimum social security to its people must be upheld\u00a0before all other priorities.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"<p>Wars of the currency kind News: Recently, RBI Governor Urjit Patel warned that the global trade war could escalate into a currency war. Important facts: 2. Trade wars erupt when countries impose tit-for-tat tariffs on imported goods, to protect domestic manufacturers. 3. Currency wars: Currency wars are triggered when nations either allow their currencies to&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/wars-of-the-currency-kind\/\">Continue reading <span class=\"screen-reader-text\">Wars of the currency kind<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-27960","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704913533},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/27960","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=27960"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/27960\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=27960"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=27960"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=27960"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}