<p>Simply because buying country A's currency priced in country B's currency means selling country B's currency.</p>

<p><em>Simplified but not simplistic example</em>: say that you have 80¥ and want to buy 10€. When buying/demanding these 10€, you will actually simultaneoualy also sell 80¥ i.e. by doing so you become a supplier of (€-priced) yuans. And because selling an asset generally exerts a downward pressure on its price, the price of 1¥ expressed in euros will decrease. Hence the explanation you read.</p>

CC BY-SA 4.0
2019-08-26T20:42:49.320Z
Any question @ChristopherU ?
keepAlive
CC BY-SA 4.0
2019-08-31T01:55:00.993Z
Could you just quickly explain the last part (And because selling an asset generally exerts a downward pressure on its price, the price of 1¥ expressed in euros will decrease), I don't really get that? Thanks!
Christopher U
CC BY-SA 4.0
2019-08-31T20:29:03.180Z
@ChristopherU : 1) If I have 1¥ and that I want to sell it, I have "to find someone" who wants to buy it. It is very likely that I will find someone who will tell me : *"I can buy it from you, but sell it cheaper (in euro), otherwise I'll buy it elsewhere"*. Given that I may not be the only seller on the market, I will accept the transaction price and sell it cheaper than I first expected.  2) By using the word *"generally"*, I mean that I may have found someone who is okay to buy it at the current price without negocation, which will not lead to a decrease in price, not very common though.
keepAlive
CC BY-SA 4.0
2019-08-26T20:40:43.910Z
2019-08-27T09:41:14.083Z
2019-08-27T09:41:14.083Z
keepAlive
<p>In easy words it will increase the supply of the currency in the international market and thus devaluation will happen because demand will be same.
International market is a free trade economy where currencies value change because of the forces of supply and demand</p>

CC BY-SA 4.0
2019-08-26T15:04:12.137Z
2019-08-26T15:04:12.137Z
Satyam Kumar Tiwari
<p>If a country wants to devalue their countries, why does buying more of a foreign countries currency devalue their currency?</p>

<p>I was reading the top answer from this question <a href="https://economics.stackexchange.com/questions/6875/how-does-a-country-devalue-its-currency">How does a country devalue its currency?</a> and it states that buying more of a foreign currency will increase the supply of the yuan. Why and how is that?</p>

<interest-rate>
How does buying more of a foreign currency devalue a nation's currency?
Christopher U
# How does buying more of a foreign currency devalue a nation's currency?

(Asked by: username_0 on 2019-08-26)

If a country wants to devalue their countries, why does buying more of a foreign countries currency devalue their currency?

I was reading the top answer from this question [How does a country devalue its currency?](https://economics.stackexchange.com/questions/6875/how-does-a-country-devalue-its-currency) and it states that buying more of a foreign currency will increase the supply of the yuan. Why and how is that?

**Tags:** interest-rate


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## 2 answers

### Answer by username_1 on 2019-08-26. Score: 2 | Accepted answer

Simply because buying country A's currency priced in country B's currency means selling country B's currency.

*Simplified but not simplistic example*: say that you have 80¥ and want to buy 10€. When buying/demanding these 10€, you will actually simultaneoualy also sell 80¥ i.e. by doing so you become a supplier of (€-priced) yuans. And because selling an asset generally exerts a downward pressure on its price, the price of 1¥ expressed in euros will decrease. Hence the explanation you read.

> **Comments:**
> **username_1**: Any question @ChristopherU ?  
> **username_0**: Could you just quickly explain the last part (And because selling an asset generally exerts a downward pressure on its price, the price of 1¥ expressed in euros will decrease), I don't really get that? Thanks!  
> **username_1**: @ChristopherU : 1) If I have 1¥ and that I want to sell it, I have "to find someone" who wants to buy it. It is very likely that I will find someone who will tell me : *"I can buy it from you, but sell it cheaper (in euro), otherwise I'll buy it elsewhere"*. Given that I may not be the only seller on the market, I will accept the transaction price and sell it cheaper than I first expected.  2) By using the word *"generally"*, I mean that I may have found someone who is okay to buy it at the current price without negocation, which will not lead to a decrease in price, not very common though.  

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### Answer by username_2 on 2019-08-26. Score: 0

In easy words it will increase the supply of the currency in the international market and thus devaluation will happen because demand will be same.
International market is a free trade economy where currencies value change because of the forces of supply and demand


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