currency war
Competitive exchange manipulation
A currency war is competitive devaluation among nations, where countries deliberately weaken their currencies to gain trade advantages.
A weaker currency makes exports cheaper and imports more expensive, boosting domestic industries at trading partners' expense.
The term gained prominence after the 2008 financial crisis when central banks aggressively lowered interest rates and expanded money supplies: Critics accused China of waging a currency war by keeping the yuan artificially low.
National currency management institution
- monetary policyCentral bank economic controls
- quantitative easingAsset purchases to boost economy
- interest ratesPrice paid for borrowing
- fiscal stimulusGovernment spending to boost economy
intervention · pegging · sterilization · monetary sovereignty
Taxes on imports
- protectionismShielding local producers
- trade deficitImports exceed exports financially
- trade surplusExports outpacing imports
- dumpingDisposing carelessly or abruptly
subsidies · trade imbalance · import substitution · mercantilism · market share · unfair advantage · trade policy · trade barriers
Revenue from crude exports
- euroShared continental currency
- renminbiChina's official money
- IMFGlobal economic assistance organization
- emerging marketsRapidly growing economies
capital flight · hot money · contagion · G20 · dedollarization
Ongoing contest between opponents
- confrontationDirect hostile encounter
- tensionStretched or strained state
- hostilityAntagonistic disposition toward others
- raceCompetition of speed
struggle · escalation · retaliation · beggar-thy-neighbor · tit-for-tat · standoff · brinkmanship · zero-sum
Asset value reduction over time
- weakeningBecoming less strong
- debaseLower in quality
- purchasing powerEconomic spending ability
- race to the bottomCompetition through degraded standards
central bank
National currency management institution
- monetary policyCentral bank economic controls
- quantitative easingAsset purchases to boost economy
- interest ratesPrice paid for borrowing
fiscal stimulus · intervention · pegging · sterilization · monetary sovereignty
tariffs
Taxes on imports
- protectionismShielding local producers
- trade deficitImports exceed exports financially
- trade surplusExports outpacing imports
dumping · subsidies · trade imbalance · import substitution · mercantilism · market share · unfair advantage · trade policy · trade barriers · bilateral trade
petrodollar
Revenue from crude exports
- euroShared continental currency
- renminbiChina's official money
- IMFGlobal economic assistance organization
emerging markets · capital flight · hot money · contagion · G20 · dedollarization
rivalry
Ongoing contest between opponents
- confrontationDirect hostile encounter
- tensionStretched or strained state
- hostilityAntagonistic disposition toward others
race · struggle · escalation · retaliation · beggar-thy-neighbor · tit-for-tat · standoff · brinkmanship · zero-sum · first-mover
depreciation
Asset value reduction over time
- weakeningBecoming less strong
- debaseLower in quality
- purchasing powerEconomic spending ability
- economic problemsmarket failure, recession, inflation, deflation, stagflation
- forex eventsdevaluation, revaluation, appreciation, floating rate, fixed rate
- financebank, CFO, banks, controller, finance
- tradetrade balance, free trade, trade barriers, customs, trade deficit
- Cold War economicsMarshall Plan, containment policy, economic sanctions, trade embargo, arms race
- money disputeswage dispute, billing error, credit dispute, rent dispute, tax dispute
currency, currencies, current, currently, concurrent, concurrently, concurrence, recurrent, recurrence