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Exact(5)
A large depreciation raises import costs which can feed through to inflation.
Many young companies make heavy investments, which means they are forced to take large depreciation charges that depress their earnings.
But increased exports are not the only impact we'd expect to see from a large depreciation (like the one Britain experienced).
The standard remedy includes tough reforms in Ukraine's case, a large depreciation (much of which has already happened), slashed energy subsidies and big budget cuts in return for funds to tide the country over until it can once again borrow from private markets.
China's policy has resulted in a large depreciation of the yuan against the euro, making it extremely hard for European firms to compete with Chinese ones.
Similar(53)
Large depreciations, once they start, can be difficult to stop.
"Many impoverished country governments are being hit by the fall in prices for the commodities they export, and large depreciations of currencies against the dollar," said Tim Jones, economist at the Jubilee Debt Campaign.
Ireland in 1987 and Finland and Italy in 1992 are examples of countries that undertook fiscal consolidations, but where large depreciations of the currency helped provide a boost to net exports.
Given the size of the trade imbalance between China and the U.S., it is not difficult to imagine an even larger depreciation of the greenback against the Yuan over the next decade.
The People's Bank of China has tried, unconvincingly, to dress up the largest depreciation as an attempt to correct "distortions" and a "one-off move to fix the discrepancy between the reference rate and the market's spot rate".
The reason: Because of the heavy depreciation charges these outfits can claim on their tax returns, the IRSviews a large part of their payouts as a return of capital rather than as taxable income.
Related(20)
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huge depreciation
enormous depreciation
large scale depreciation
large sort
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