Devaluation: notes on the position in Rhodesia and neighbouring countries

Abstract

It is interesting to recall the different circumstances surrounding the successive devaluations of the pound sterling. In 1931 the severe unemployment brought on by the great depression was reason enough for the 30 per cent British devaluation. It was hoped that the unemployment centred in the export industries but which had spread throughout the economy, would be eliminated by boosting exports through devaluation. In the event, this hope was not entirely realised and it took the preparation for a world war to completely solve the problem in the U.K. South Africa, initially attempting to maintain the value of her currency in the face of the British action, was forced to follow suit fifteen months later. The serious outflow of speculative funds on capital account, the pressure on agricultural exports and the harmful effects on the gold mining industry made this inevitable.