Impact of exchange rate changes on imports and exports

1. Influence of exchange rate change on import and export trade balance

Exchange rate changes will cause changes in the prices of import and export commodities, thus affecting a country's import and export trade. The external devaluation of a country's currency is conducive to increasing its exports and curbing imports. On the contrary, if the foreign currency of China appreciates, it is conducive to import, but not conducive to export; The impact of exchange rate changes on non trade balance is the same as its impact on trade balance.

2. Influence of exchange rate change on domestic price level

First, the impact on the price of trade goods; Second, the impact on the price of non tradable goods.

3. Influence of exchange rate changes on international capital flows

The impact of exchange rate changes on capital flows is shown in two aspects: first, after the devaluation of the local currency, the unit of foreign currency can be converted into more local currency, which will increase the inflow of foreign capital and reduce the outflow of domestic capital; Second, if the external value of the local currency will not depreciate and the foreign exchange rate will not rise, it will affect people's expectations of the exchange rate, and then cause domestic capital flight.

4. Effect of exchange rate changes on foreign exchange reserves

The impact of currency depreciation on the scale of a country's foreign exchange reserves; The exchange rate change of reserve currency will affect the real value of a country's foreign exchange reserves; The frequent fluctuation of exchange rate will affect the position of reserve currency.

5. Influence of exchange rate change on domestic employment, national income and resource allocation of a country

When the exchange rate of a country's local currency declines and the exchange rate of foreign exchange rises, it is conducive to promoting the increase of the country's exports and inhibiting imports, which makes its export industry and import substitution industry develop vigorously, thus speeding up the development of the entire national economy, increasing domestic employment opportunities and increasing national income. On the contrary, if the currency exchange rate of - country rises, the country's export will be blocked; Imports have increased substantially due to the stimulus of exchange rate, causing the shrinkage of the country's export industry and import substitution industry, and resources will be transferred from the export industry and import substitution industry] to other sectors.

6. The impact of exchange rate changes on the world economy

The exchange rate change of small countries only has a slight impact on the economy of their trading partners, while the change of the exchange rate of the freely convertible currencies of developed countries has a relatively large, even huge impact on the international economy.