<p>how can devaluation of a nation's currency  lead to increase in government expenditure, hence facilitating economic growth.</p>

<p>I was reading through a textbook and saw that the devaluation of a nation's currency  can lead to increase in government expenditure, hence facilitating economic growth.... But it wasn't really explained. How is this possible please? I need an economist perspective. I'm an accountant.</p>

CC BY-SA 3.0
2015-10-06T10:14:07.500Z
What was the exchange rate regime? That is very important information to answer your question.
BB King
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2015-10-06T10:17:20.297Z
It is Floating type
user274246
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2015-10-06T10:22:07.537Z
Floating exchange rates
user274246
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2015-10-06T14:03:58.160Z
Is it something to do with making it easier for foreign entities to finance the government's debt @BBKing?
msouth
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2015-10-06T15:11:55.167Z
With a fixed exchange rate regime the government might have to react in some way to maintain the exchange rate possibly. Even then it would be a bit farfetched though. With a float, its even harder to make the case that government expenditure should increase. Maybe there are some other details that explain the statement, but there is surely not a standard link here between government expenditure and exchange rates per se.
BB King
<macroeconomics><microeconomics><supply-and-demand><international-trade>
how can devaluation of a nation's currency lead to increase in government expenditure, hence facilitating economic growth
user274246
# how can devaluation of a nation's currency lead to increase in government expenditure, hence facilitating economic growth

(Asked by: username_0 on 2015-10-06)

how can devaluation of a nation's currency lead to increase in government expenditure, hence facilitating economic growth.

I was reading through a textbook and saw that the devaluation of a nation's currency can lead to increase in government expenditure, hence facilitating economic growth.... But it wasn't really explained. How is this possible please? I need an economist perspective. I'm an accountant.

**Tags:** macroeconomics, microeconomics, supply-and-demand, international-trade

> **Comments:**
> **username_1**: What was the exchange rate regime? That is very important information to answer your question.  
> **username_0**: It is Floating type  
> **username_0**: Floating exchange rates  
> **username_2**: Is it something to do with making it easier for foreign entities to finance the government's debt @username_1?  
> **username_1**: With a fixed exchange rate regime the government might have to react in some way to maintain the exchange rate possibly. Even then it would be a bit farfetched though. With a float, its even harder to make the case that government expenditure should increase. Maybe there are some other details that explain the statement, but there is surely not a standard link here between government expenditure and exchange rates per se.  

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