Undervalued Currency

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Undervalued Currency

A currency with an exchange rate lower than it ought to be. A currency may be undervalued, for example, when its purchasing power, supply and demand are all strong, but its price is still comparatively low. Some governments keep their currencies undervalued deliberately because it makes their exports less expensive, but this is usually an unsustainable policy. See also: Weakening of a currency.
References in periodicals archive ?
With undervalued currencies potentially benefiting export businesses or companies with many foreign competitors, this information can influence our assessment of longer-term earnings potential and valuations.
Other undervalued currencies on the list included but were not limited to Malaysian ringgit, Chinese yuan, and South African rand.
It has long complained that other countries (namely those in Asia and Latin America) have undervalued currencies, which make US exports less competitive.
Most strikingly, slowdowns come earlier in economies with undervalued currencies.
plan that included letting undervalued currencies strengthen would gain support at a contentious weekend Group of 20 meeting, lifting gold and oil prices.
Taking a jab at China, Geithner complained that foreign exchange intervention by countries trying to keep undervalued currencies from appreciating threatened the global recovery.
Taking a jab at China, he complained that foreign exchange intervention by countries trying to keep undervalued currencies from appreciating was threatening the global recovery.
government to impose duties on imports from countries with undervalued currencies.
However, traders have begun moving to alternative strategies such as valuation trades - where investors seek out seemingly undervalued currencies - and such behaviour reflects a growing understanding and knowledge of the FX space, and the strategies that dominate it, by traders.
macroeconomic stability and an outward orientation), but also what might be called "productivist" policies: undervalued currencies, industrial policies, and financial controls.
They are now undervalued currencies and there is much talk in the region centred on these currencies which are - with the exception of Kuwait - all pegged to the dollar, and thus kind of pegged to each other," he told delegates.