On the back of sluggish growth of the global economy, many countries are making efforts to weaken their national currencies with the aim of propping up their economies.
Amid fierce competition in the global sales market, an undervalued currency makes export goods cheaper for foreign buyers, thus countries with weaker currencies gain a competitive advantage. Therefore, a weaker currency boosts export sales. Recently, US President Donald Trump accused big exporters of deliberately pushing their currencies down. Top trade advisor to US President Peter Navarro called Germany a “currency exploiter”. The official stated that Germany is exploiting the US with a “grossly undervalued” currency. Peter Navarro dared to describe the single European currency as an “implicit Deutsche Mark”. In response, German Chancellor Angela Merkel said that the country has no influence over the euro exchange rate. She also noted that the European Central Bank pursues an independent forex policy like Bundesbank used to control forex rates of the Deutsche Mark before the euro was introduced. “I neither want to nor can I do something to change the situation,” Angela Merkel told reporters.
