soft currency

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Related to Currency Weakening: Strong Currency

Soft currency

The money of a country that is expected to drop in value relative to other currencies.

Soft Currency

A currency that fluctuates in value frequently. Soft currencies are generally issued by governments that are less stable and/or have weaker economies than stronger currencies. As such, most soft currencies come from countries in the developing world. Central banks rarely hold reserves of foreign soft currencies as they do little or nothing to stabilize the local currency. A soft currency is also called a weak currency. See also: Strong currency.

soft currency

a FOREIGN CURRENCY that is in weak demand, but in abundant supply on the FOREIGN EXCHANGE MARKET. This situation usually arises when a country is in persistent balance-of-payments deficit. Compare HARD CURRENCY.

soft currency

a FOREIGN CURRENCY that is in weak demand but in abundant supply on the FOREIGN EXCHANGE MARKET. Soft currency status is usually associated with an economically weak country that is running a large deficit in its BALANCE OF PAYMENTS; the supply of the currency is high to finance the purchase of imports, but demand for the currency is relatively weak because the amount of it being required for the purchase of exports is much lower. Under a FLOATING EXCHANGE RATE SYSTEM, however, the demand for, and supply of, the currency should be, in theory, brought into balance by a DEPRECIATION 1 in its EXCHANGE-RATE value. Compare HARD CURRENCY.
References in periodicals archive ?
The company warned that growth in emerging markets continues to slow as a result of significant currency weakening.
However, while the telecom company notes a 4% growth for its Sudan operations, the growth figure in Sudan's local currency, the Sudanese pound, is reflected to be higher because of this currency weakening dramatically against the dollar in this year.
The pressure we have been noticing in global stocks this week (as a likely reaction to the lower oil prices) is weighing on the USD, with the major currency weakening against the Euro, UK Sterling, Swiss Franc, Japanese Yen, Canadian Loonie, Australian Dollar and Kiwi Dollar yesterday.
The EBRD said, 'Moldova is going through a particularly difficult time - a banking crisis, currency weakening and a sharp economic decline.
Often currency weakening alone will not be enough to absorb the pressures from a depreciating Japanese yen, and export prices have also to be reduced to safeguard exports.