A strong currency usually brings some important changes:
Imports Get Cheaper: When a country’s money is strong, they can buy more stuff from other countries for less money. This makes buying imported goods appealing.
Exports May Go Down: On the flip side, when other countries see that your goods cost more, they might not buy as many of them. This means fewer exports.
In short, a strong currency can impact a country's trade. When imports go up because they’re cheaper, but exports go down due to higher prices, it might lead to a trade deficit. This means the country is spending more on imports than it is earning from exports.
A strong currency usually brings some important changes:
Imports Get Cheaper: When a country’s money is strong, they can buy more stuff from other countries for less money. This makes buying imported goods appealing.
Exports May Go Down: On the flip side, when other countries see that your goods cost more, they might not buy as many of them. This means fewer exports.
In short, a strong currency can impact a country's trade. When imports go up because they’re cheaper, but exports go down due to higher prices, it might lead to a trade deficit. This means the country is spending more on imports than it is earning from exports.