All topics -> Estonia -> Economy
2008-11-26 15:25 - Devaluation of Estonian currency (MatasM)
One of the most popular questions nowadays – will the devaluation of krona will be performed. This topic will be dedicated for:
- clearly presenting the advantages and disadvantages of devaluation of krona for Estonia, local companies and residents (see below);
- following the provided information connected to the devaluation of krona both in local and foreign media. In the introduction of the topic articles with links will be provided where the devaluation of krona was mentioned. This will be helpful when following the developing news chronology (see below);
- discussing the possibility of krona devaluation.
Devaluation is considered:
- When the country’s current account deficit is increasing rapidly – more is spent than received;
- When the country’s export stops – product produced in the country becomes uncompetitive abroad, which causes the decrease of production and increase of unemployment;
- When the budget deficit of the country is increasing – in pursuance to increase income of the country and decrease the budget deficit due to unincreased expenses;
- When willing to decrease the foreign debt (this is relevant when the most part of obligations is in local currency);
- when the reserve of the foreign currency is runs low – after the devaluation the value of foreign currency relatively increases.
Advantages of devaluation:
- the country increases the competitiveness of its products, export increases as well – products are produced for the same price in local market, however due to the depreciated currency exchange rate the products become cheaper abroad (competitive);
- Production increases due to the increased export;
- Unemployment may decrease, since more workers will be hired in companies exporting products and services;
- Residents, who have loans in local currency, would win, since they would have to return relatively smaller amounts to the bank. Banks would experience serious losses.
Disadvantages of devaluation:
- Import decreases – the importers cannot compete with the local production price-wise;
- purchasing power of the residents would decrease – if all goods and services were local, in that case the purchasing power would only decrease abroad, since less could be bought for the same currency;
- Inflation would increase – since the country imports most of the material for manufacturing from abroad, the expenses of companies would increase. The expenses then would be an additional weight on the shoulders of the residents by increasing prices of production and services;
- Consumption would increase – residents would economize less (deposits), would not invest in financial products (insurance, pension, securities) – the increasing inflation would make the economizing financially unprofitable;
- Financial difficulties would occur to the people who receive determined disbursement – pensioners, teachers – they would have difficulties living out of their salaries;
- Reliance of partners abroad would decrease as well as the appeal of the country for the foreign investors, since we would appear as an unreliable country;
- adoption of EURO would be postponed for 2 years later than the actual forecasts (2012 - 2013) – the time Estonia spent connected to the Second currency rate mechanism of the euro zone (ERM-2) would be worth 0 again;
- the residents, who have loans in foreign currency, would encounter serious difficulties, since the amount which they would have to pay the bank back would be significally larger than the amount they have borrowed.
Comments
MatasM
Rimčiau užsiminta ir apie Estijos kronos devalvaciją. Matyt tai daugiau siejama su TVF pagalba, kuri dažniausiai iškelia savo sąlygas dėl paskolos išdavimo.
Dainora
MatasM
Estai tiesiai šviesiai sako arba mažinam išlaidas, arba devalvuojam krona. Jokių pozicijos suapvalinimų.
Dainora
Lauri: Devaluation would destroy Estonia’s good reputation
Sõerd: The fear of devaluation stays until Estonia joins euro
Estonians were more interested in buying euros
Which D shall Estonia choose?
Netgi dienos klausimas skamba taip: Which path is better for Estonia - devaluation or deflation? 43 proc. už defliaciją, 39 proc. už devalvaciją - nuomonės pasiskirstę labai apylygiai. Defliacija, dėsningas kainų mažėjimas, irgi anaiptol ne džiaugsmas - prisiminkim JAV per Didžiąją Depresiją, kai buvo įsisukusi defliacinė spiralė, arba prarastąjį Japonijos dešimtmetį. Defliacijos metu pinigų vertė kyla, o turimo turto ir prekių - smunka. Dėl to vartotojai ima atidėti savo pirkimus, kad po kurio laiko už turimus pinigus galėtų įsigyti daugiau prekių. Pasekmė - stabiliai mažėjantis vartojimas ir BVP. Defliacija nenaudinga skolininkams - jų pasiskolinto turto vertė krenta, o už ją mokėti reikia "pabrangusiais" pinigais. Tai pat pakyla realus darbo užmokestis, su kuriuo nespėja produktyvumas, o kadangi paklausa stipriai kritusi, darbdaviai ima atleisti darbuotojas - auga nedarbas. Svarbiausia, kad defliaciją sunku kontroliuoti - monetarinę politiką galinčios vykdyti šalys dažniausiai jau būna palūkanų normą numažinę iki 0, kaip Japonija, ir stimuliuoti paklausos tiesiog nebėra kaip. Su fiskalinėm priemonėm taip pat nelengva dėl recesinio biudžeto. Tiesa, yra vienas kovos būdas - economic stimulus (kaip čia į LT kalbą verčiasi :)?). JAV dabar tai ir daro - prispausdins pinigėlių ir stimuliuos ekonomiką. Bet ką darys Baltijos "tigriukai"?
MatasM
Estijos gyventojai suskubo keistis kronas į eurus bijodami devalvacijos. Panašu, kad greitu metu iki mūsų daeis dar viena banga kalbų ir gandų dėl devalvacijos.
MatasM
Šiek tiek žibalo į šios temos tolesnį plėtojimą :) kokios mintys?
Dainora
Švedų centrinis skolina Estijos centriniui (apie 1 mlrd. USD) ir gerina jo likvidumą. Kai tiek daug investuota Estijoj (ypač bankų), dedamos pastangos, kad situacija pagerėtų. Panašu, kad estams artėja blogos dienos - vis netyla kalbos apie skolinimąsi iš TVF.
MatasM
Estijos pramonės ir komercijos rūmų vadovas sako, kad nėra reikalo dabar devalvuotis, kai privatus sektorius jau pasidevalvavo sumažindamas kaštus.
MatasM
Pliusai minusai dėl kronos devalvacijos.