Currency Devaluation (The case of Guinea)

Topic

Currency Devaluation (The case of Guinea)

Instructions

Write a Literature Review on the Currency Devaluation in West African countries

Answer preview

6 countries in Africa celebrated 50 years of independence in 2017. Critics, however, argue that neocolonialism has led to these countries lingering with little or no degree of autonomy. CFA franc which is a general name for currencies in West African states are still guaranteed by France and her treasury (Fourie, 2016).

State currencies devalue because of numerous reasons including, but not limited to, economic downturn which creates a deficit in the balance of payment coupled with inflation. A sequence of economic turmoil’s as has been seen in guinea due to instabilities in politics and the Ebola outbreak decreased the GDP. Devaluation was used by the government in commodity market increase the purchasing power of the country and trigger exports (Bausch & Schwarz, 2014). The failing credit conditions and incorrectly organized monetary policies have been seen to relate to poor fiscal controls by their central bank (Traore & Watanabe, 2017).

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