the on going cold war using currency as a tool to come forward.

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!!!