Implications of a fall in the exchange value of the currency of countries that have a deficit in their balance of payments in goods and services:

• Local currency becomes cheaper relative to other currencies.
• Exports to the debtor country become relatively cheaper, and buyers in other countries will buy more of them.
• Imports from other countries become relatively more expensive, so domestic buyers will buy fewer imported goods (and might switch to buying more domestically-produced goods).
• If exports go up and imports fall, the balance of payments position in goods and services will improve.
• A very substantial change in foreign currency exchange rates is needed to rectify a very large disequilibrium in international payments.
• Inflation increases prices of goods and services.
• Increase in remittance from abroad (inflows).