A weak currency is an unstable and bearish currency.
Due to the excessive issuance of money, the gold content or purchasing power of paper money will continue to decline, and the value of other currencies will also continue to decline.
In addition, there is a large deficit in the balance of payments, which will also make the currency of a country and other countries’ currencies continue to decline.
In the international financial market, it is usually referred to as a soft currency with a declining value and a weak exchange rate.
In international trade, soft currency settlement is generally beneficial to importers;
In international credit, borrowing in soft currency generally benefits the debtor;
In international reserves, generally should not maintain soft currency, in case of exchange rate decline suffered losses.
In times of severe market turmoil, soft currencies are often the target of market selling.
