Quantitative Easing vs. Currency Manipulation: What's the Difference?
Stocks, bonds, and commodities, including currency, are all traded through the global marketplace. When a government sells its currency and buys a foreign currency, usually U.S. dollars, the value of their currency goes down and the value of the dollar goes up. This has the affect of making their goods and services cheaper to export and, in this case, the cost of U.S. imports more costly.
Key Takeaways From Investopedia.com Article
- In the wake of a financial crisis, central banks can employ quantitative easing (QE), or purchasing various types of securities in the market, as a stimulus.
- QE effectively adds new money to the economy by creating the funds used to purchase those securities, which also helps stabilize markets.
- Currency manipulation is an effort to tinker with the value of a nation’s currency about foreign currency exchange rates to boost exports in international trade or reduce its debt interest burden.
- Currency devaluation can lead to trade wars and backfire on the country trying to undertake it.
Quantitative Easing vs. Currency Manipulation: What's the Difference? by Matthew Johnston on Investopedia.com.
Read the article here:
Quantitative Easing vs. Currency Manipulation: What's the Difference?
Contact C&M Bookkeeping Today
Call us to explore outsourcing your company’s bookkeeping and payroll duties. Let’s meet to discuss what C&M Bookkeeping can do for you.
0 Comments