Protective measures is international practice
February 13. Kazpravda
By Sergei OSANOV
In two years the rate of Japanese yen fell against the U.S. dollar by almost 40 %, which stimulated the growth of industrial production, and world-renowned company Toyota even expects to receive a record profit since its foundation.
Correction of the national currency is a common measure in the world. Back in early 2012, one dollar at the foreign exchange market corresponded to 76 yen and today it is equal to 102 ¥, i.e., the yen fell sharply in price.
And this was done by the Japanese government in order to protect their producers. The currency interventions in the country cost huge amount of money. But there was no alternative then. The Japanese currency in times of crisis attracted the moneybags by its reliability: it was bought like gold in order to preserve capital. But this measure played a negative role for the country because many companies turned to be on the verge of bankruptcy and Japanese products were not in demand in the world markets for their high prices. Then it was decided to devaluate the national currency, because Japan as a WTO member does not have a full opportunity to independently change tariff and customs barriers.
Now the result is obvious: the number of successful companies in Japan is growing, as the world media reports. More than 235 companies over the past year increased profit by 40%. Depreciation of the yen led to higher incomes in electronics industry and steel production; the firms engaged in securities transactions actively conducted their business due to the stock market’s recovery.
Similar situation was in Switzerland, the franc of which, as well as the yen, was considered a kind of safe haven, where the safety of financial investments was guaranteed. But these once highly reliable banknotes also rose in price, which dramatically lowered demand for goods of the alpine country. The Swiss bank also had to take protective measures, after which the national currency fell sharply.
Monetary policy of China is also aimed primarily at protecting their producers, because of which there are uninterrupted tensions between the business community of China and United States. The USA insists on depreciation of the yuan against the dollar, but all these attempts come to naught and cheap Chinese goods continue to gain more and more new markets.