Causes Of Financial Crisis

To this day we see a lot of currency instability, this is due to the large number of currency and capital flight that has occurred since the 1990s. Instability of this currency which then makes a decline in the value of a country's currency to affect the economy of a country.

Instability at the exchange rate begins to create where one unit of currency is no longer purchased as much as it is used. In other words the currency crisis began to occur and develop due to the interaction between the expectations of investors and what makes their hopes happen.
RELATIONSHIP BETWEEN THE ROLE OF INVESTORS FROM THE CENTRAL AND GOVERNMENT BANK POLICY


In the face of a currency crisis, the central bank will make a policy by maintaining the current fixed exchange rate by cutting the country's foreign exchange reserves, or by simply letting the exchange rate fluctuate in the market.

When the market wants a devaluation, using foreign exchange reserves to keep the exchange rate is a solution. Currency pressure will actually be offset by any rising interest rates. Then the central bank must reduce currency circulation to increase the exchange rate.

Selling foreign exchange reserves can also be used by Banks to create capital outflow, when the bank starts to partially dispose of foreign exchange reserves and then the payment received in the form of local currency will hold the main circulation which will then become an asset.

But this solution can not last forever, the lack of foreign exchange reserves as well as factors such as politics and economy and unemployment will be a further problem.


The currency devaluation makes the domestic goods cheaper than foreign goods, this is the impact of the exchange rate which can then also affect the increase in the labor market to increase output.

In the short term, devaluations must also be accompanied by an increase in interest rates that are also offset by increasing the money circulating in the community and also increasing foreign exchange reserves.

Shoring up the exchange rate can be done by taking all the existing foreign exchange reserves, but devaluing the currency will quickly increase the foreign exchange reserves

This policy is clearly harmful to the bank, but very profitable for investors, if this devaluation strategy is really used will be able to make investors become real.

If the market wants a currency devaluation by the central bank, it will increase the value of currency and exchange rate. This means that the possibility of an increase in foreign exchange reserves through aggregate demand will not occur. But what happens is the opposite where the central bank will use their foreign exchange reserves to reduce the amount of money circulating in the community that is useful to increase interest rates.
AN ANTOMIC CRISIS


This happens when investors lack confidence in economic stability, at times like this they will try to earn money abroad, this is called capital flight, where investors will sell their denominated currency investments in the country.

This incident clearly made the exchange rate much worse resulting in a decline in the value of the currency as they began to convert their investments into foreign currency. As a result, the country may not be able to finance capital expenditure

Doing the prediction of a country experiencing a currency crisis is not really easy, there is a lot of analysis of a very diverse collection and also a very large variable. This is the factor of factors that generally directly relate to the crisis

The country that has a lot of loans
The rapid increase of currency value
The uncertainty of the government makes investors uneasy.

The growth in many developing countries will generally be a very positive thing for the global economy, but a very rapid rate of growth will inevitably result in instability and also a very high level of capital flight plus the decline in the value of the domestic currency.

The efficiency of the central bank will actually be helpful, but actually predicting where the economic route will be is a journey is not easy.
Ini terjadi saat berkurangnya kepercayaan investor dalam stabilitas ekonomi, di saat seperti ini mereka akan coba untuk dapatkan uang di luar negeri, keadaan inilah yang disebut dengan pelarian modal, dimana investor akan menjual investasi mata uang mereka yang denominasi di dalam negeri.
Kejadian ini jelas membuat nilai tukar menjadi jauh lebih buruk yang mengakibatkan menurunnya nilai mata uang karena mereka mulai mengkonversi investasi yang mereka miliki ke dalam mata uang luar negeri. Akibatnya negara tersebut bisa saja tidak mungkin membiayai pembelanjaan modal
Melakuakan prediksi sebuah negara mengalami sebuah krisis mata uang sebenarnya tidaklah mudah, ada banyak analisis kumpulan yang sangat beragam dan juga variabel yang sangat banyak. Inilah faktor faktor yang umumnya bergubungan secara langsung dengan krisis  yang terjadi
  • Negara yang memiliki pinjaman sangat banyak
  • Pesatnya peningkatan nilai mata uang
  • Ketidakpastian pemerintah yang membuat investor gelisah.
Pertumbuhan yag terjadi di banyak negara berkembang pada umumya akan menjadi hal yang sangat positif bagi perekonomian global, aka tetapi tingkat pertumbuhan yang sangat cepat mau tidak mau akan meciptaka sebuah instabilitas dan juga tingkat pelarian modal yang sangat tinggi ditambah juga denga turunnya nilai mata uang domestik.
Efisiensi bank sentral sebenarnya akan sangat membantu, tapi sebenarnya memprediksi kemana rute ekonomi akan berjala adalah sebuah perjalanan yang tidak mudah.
Ini terjadi saat berkurangnya kepercayaan investor dalam stabilitas ekonomi, di saat seperti ini mereka akan coba untuk dapatkan uang di luar negeri, keadaan inilah yang disebut dengan pelarian modal, dimana investor akan menjual investasi mata uang mereka yang denominasi di dalam negeri.
Kejadian ini jelas membuat nilai tukar menjadi jauh lebih buruk yang mengakibatkan menurunnya nilai mata uang karena mereka mulai mengkonversi investasi yang mereka miliki ke dalam mata uang luar negeri. Akibatnya negara tersebut bisa saja tidak mungkin membiayai pembelanjaan modal
Melakuakan prediksi sebuah negara mengalami sebuah krisis mata uang sebenarnya tidaklah mudah, ada banyak analisis kumpulan yang sangat beragam dan juga variabel yang sangat banyak. Inilah faktor faktor yang umumnya bergubungan secara langsung dengan krisis  yang terjadi
  • Negara yang memiliki pinjaman sangat banyak
  • Pesatnya peningkatan nilai mata uang
  • Ketidakpastian pemerintah yang membuat investor gelisah.
Pertumbuhan yag terjadi di banyak negara berkembang pada umumya akan menjadi hal yang sangat positif bagi perekonomian global, aka tetapi tingkat pertumbuhan yang sangat cepat mau tidak mau akan meciptaka sebuah instabilitas dan juga tingkat pelarian modal yang sangat tinggi ditambah juga denga turunnya nilai mata uang domestik.
Efisiensi bank sentral sebenarnya akan sangat membantu, tapi sebenarnya memprediksi kemana rute ekonomi akan berjala adalah sebuah perjalanan yang tidak mudah.

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