Over the last couple of years theUnited Statesdollar has been depreciating against other major currencies. These are mainly currencies of the organization of the economic cooperation and development (OECD). What are the main causes for the depreciation of the U.S dollar?
what are some of the impacts of this on both the U.S economy as well as the global economy currently and in the long run? What can be done to prevent further depreciation of the U.S dollar?
TheUnited Statesdollar is the world’s major exchange and transactional currency. This being so it is imperative that its currency is stable in order to secure international transactions. Once the currency depreciates on a yearly basis it is important to know the cause and offer solutions to rectify the situation. As thus, it is important to know whether it is the country’s fiscal policy, the monetary policy or the financial policy that is causing the currency to depreciate.
In addition it is also important to investigate whether the depreciation is caused by external factors like the rise of china as an economic power or the strengthening of the euro. Analyzing such economic factors will lead us to predict or offer solutions to prevent the depreciation of the dollar.