Benefits of a weak national currency?

Question

I often hear that developing economies can benefit from a weak national currency. For example China as exporter deliberately makes its national currency weaker, so that it gains an advantage. Are there some underlying mechanisms which can explain this?

Answer 1

If you're asking why a weaker currency might be beneficial, the reason is simply that it increases exports: other countries need to buy your currency in order to buy your goods, so a cheaper currency makes your goods cheaper, raising demand for them. If you are trying to export more or increase aggregate demand, a weaker currency will help you do that. (If you were asking HOW you make your currency cheaper, let me know.)