In order to find out what the devaluation, consider how this term is formed.The word is formed by the combination prefix «de», which has a value of "cancellation, loss," and the Latin word «valeo», which can be translated as "worth it to have value."Thus, devaluation is the process of the loss of the national currency of its value relative to the value of foreign currencies.In other words, the devaluation of the ruble - is the depreciation of the ruble against the international currencies.
essence devaluation
If you want to understand what devaluation, need to learn to distinguish this process from the effects of inflation, though it also leads to higher prices.If there is a devaluation of the national currency on the scale of the region, we are talking about inflation, and if depreciation is happening on international markets, it means devaluation.And if the state to control the inflationary process is very difficult, the decline in the value of the national currency is one of the instruments of the monetary policy of the Central Bank.
devaluation can be both open and hidden.In the first case about it officially announces the country's central bank, and the exchange should be devalued currency, or they are removed from circulation.In the second case, a reduction in value of the currency of the country on international currencies.In this case, there is no withdrawal from circulation of depreciated money.
consequences of devaluation
After we found out what the devaluation, consider the implications that it has for each of us.
When the value of a country's currency is reduced, it has both positive and negative side.Among the advantages of this process we can highlight the growth of domestic demand for domestic goods, promoting exports and reducing the rate of spending of foreign reserves.However, the negative consequences can neutralize all the positive moments.
devaluation provokes inflation leads to loss of confidence in the national currency, reduction of imports and higher prices for foreign goods, raw materials and technology.Banks appear queues of people who want to withdraw their deposits.The actual size of salaries and pensions is falling and consequently reduced buying activity.
devaluation in Russia
The Russian devaluation is almost inevitable.According to Sergei Aleksashenko, who is head of macroeconomic research "Development Center" HSE in 2013, Russia's GDP may show only a slight increase of 2%.In such circumstances, the social initiatives of the President of the Russian Federation can be realized only in the event of GDP level of 4-4.5%.
Today is unknown, what sectors of the economy are able to give such an increase.The high-tech industry, that is the production of equipment and machines, experienced a strong slowdown.In the manufacture of pulp and paper industry, wood and vehicles and there is a decline.Other branches are in stagnation.Only the raw materials sector shows significant growth, but in general we can say that the industry is experiencing a period of stagnation.
And even at the high price of oil in the area of $ 110 per barrel stability of Russia's balance of payments could falter as early as during the current quarter in the case of the fall of the value of balance of payments to the level of less than 1% of annual national product.In quarterly terms, this value is equal to 4 billion US dollars.
According to the analyst, whenever the balance of payments surplus went down less than 1% of the GDP for the year in the Russian ruble devaluation necessarily occur.However, quantifying the level of the projected fall expert traditionally refused.
Thus, see what the devaluation is likely, it will be possible in reality very soon.
