both import and export trade for a country. Currency stability reduces the risks for both importers and exporters. Currency fluctuations, however, can provide import and export opportunities, as well as cause constrictions in import and export activity. Risks almost always are greater, however, during periods of currency instability. Such risks are associated with the potential to lose value through the currency exchange process during periods of currency instability (Boltho, 1996).
As a general rule, one may assume that a reduction in the international exchange value of a nation's currency will act to increase the potential of producers in that country to export to other countries, while reducing the country's import potential. The reasons for such outcomes are that (1) a reduction in the international exchange value of a country's currency causes products made in that country to be less expensive in other countries, thereby improving the country's export potential, while (2) that same reduction in international exchange value causes products and services produced in other countries to be more expensive in the country whose currency lost value, thus reducing that country's import potential.
Conversely, as a general rule, one may assume that an increase in the international exchange value of a nation's currency will act to decrease the potential of producers in that country to export to other countries, while increasing the country's import potential. The reasons for such outcomes are that (1) an increase in the international exchange value of a country's currency causes product made in that country to be more expen
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