Devaluation in Developing Countries May Worsen Inflation and Debt Burden
Devaluing a currency in developing countries can have negative effects on the economy by increasing costs of imports, wages, and reducing credit to businesses. This can lead to inflation and make it harder to pay off foreign debts. A planned slowdown in currency depreciation may not be effective in managing demand. Overall, devaluation may not be the best solution for economic problems in the short term.