What really is "Devaluation of Naira?"

Devaluation is a DELIBERATE reduction in the value of a
country's currency in relation to the currencies of other
countries. Devaluation is different from depreciation.
Whereas devaluation is deliberate, depreciation of
currency is caused by some macroeconomic factors.

However, Devaluation is used to discourage import and
encourage export of goods and services across borders.
How do we achieve this? When a country's currency is
devalued, foreign goods (imports) become so expensive
because the value of the country's currency has been
reduced making the value of the currency of her trading
partner to go up. In this case, the foreign country will be
enticed to import from Nigeria (for instance) and our
hitherto importers will equally buy Nigerian made products
because of high cost of foreign goods.

This makes our
balance of payment to become favourable.
In the long run (in future), the high rate of export from
Nigeria and low import of foreign products by Alaba guys
(lol) will increase the value of our naira.
Hope you benefitted from this?

We appreciate you for reading On baze360, but we think it will be better you like our facebook fanpage and also follow us on twitter below.
Follow @Yloadedofficial

Are you an artiste? Do you want your music to go viral and reach a large number of audience? Promote your music on baze360 by clicking here. You can also advertise your product or brand by clicking here.