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Central banks for depreciation

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Exporters in many countries complain if the (local) currency appreciates and pressure their central banks for depreciation.

Some countries that are net importers accuse those exporter countries of deliberately keeping its currency undervalued and try to pressure them to allow their currencies to appreciate in value.

If net exporter countries allowed its currency to appreciate in value, what would be the likely effect on exports, current account and output? Very briefly explain the mechanism showing that you know what you are talking about.

Reference no: EM131176918

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