IELTS Writing Task 2: Expert Sample Essays on Currency Devaluation and International Investments

Currency devaluation and its impact on international investments is a complex economic topic that has appeared in IELTS Writing Task 2 questions with increasing frequency over the past few years. Given the global nature of economics and finance, this trend is likely to continue, making it an important subject for IELTS candidates to be prepared for. Based on an analysis of past exam questions, we have identified a relevant prompt that closely aligns with this theme:

Some people believe that a country should devalue its currency to boost exports and reduce imports. Others think this policy can harm the economy in the long run. Discuss both views and give your own opinion.

Let’s analyze this question and provide sample essays for different band scores to help you understand how to approach this topic effectively.

Question Analysis

This question falls under the “discuss both views and give your opinion” category, which requires you to:

1. Explain the viewpoint that supports currency devaluation
2. Discuss the opposing view that this policy can be harmful
3. Provide your own perspective on the issue

Key points to consider:

• The potential benefits of currency devaluation (e.g., increased exports, reduced imports)
• The possible long-term negative consequences
• Economic concepts such as trade balance, competitiveness, and inflation
• Real-world examples or case studies to support your arguments

Sample Essay 1 (Band 8-9)

Currency devaluation is a contentious economic policy that has both proponents and critics. While some argue that it can stimulate exports and improve a country’s trade balance, others contend that it may lead to long-term economic instability. This essay will examine both perspectives before presenting my own view on this complex issue.

Those in favor of currency devaluation often point to its potential to boost a nation’s export sector. When a country’s currency loses value relative to others, its goods become cheaper in international markets, potentially increasing demand and sales abroad. This can lead to job creation in export-oriented industries and an overall improvement in the trade balance. Additionally, a weaker currency can make imports more expensive, encouraging domestic consumers to buy locally produced goods and further supporting the national economy.

However, critics argue that the benefits of devaluation are often short-lived and can lead to significant economic challenges in the long run. One major concern is the risk of inflation, as imported goods become more expensive, potentially triggering a cycle of price increases across the economy. This can erode the purchasing power of citizens and lead to economic instability. Furthermore, devaluation can discourage foreign investment, as international investors may be wary of putting their money into a country with a volatile currency. This can limit access to capital for domestic businesses and hinder economic growth.

Effects of currency devaluation on international trade

In my opinion, while currency devaluation can offer short-term benefits, it is a risky strategy that should be approached with caution. The potential for long-term economic instability outweighs the temporary gains in export competitiveness. Instead, countries should focus on improving productivity, investing in innovation, and developing high-value industries to enhance their global competitiveness sustainably. This approach can lead to more stable economic growth without the risks associated with currency manipulation.

In conclusion, currency devaluation is a double-edged sword that can provide immediate export advantages but also pose significant long-term risks. Policymakers must carefully weigh these factors and consider alternative strategies to promote economic growth and stability. Ultimately, a balanced approach that prioritizes fundamental economic strengths over short-term currency adjustments is likely to yield more sustainable results.

(Word count: 392)

Essay 1 Analysis (Band 8-9)

This essay demonstrates the qualities of a high-scoring IELTS Writing Task 2 response:

1. Task Achievement: The essay fully addresses all parts of the task, discussing both views and clearly stating the writer’s opinion.

2. Coherence and Cohesion: The essay is well-organized with clear paragraphing and effective use of cohesive devices (e.g., “However,” “Furthermore,” “In conclusion”).

3. Lexical Resource: It uses a wide range of vocabulary accurately and appropriately, including topic-specific terms like “trade balance,” “inflation,” and “economic stability.”

4. Grammatical Range and Accuracy: The essay demonstrates a variety of complex sentence structures with minimal errors.

5. Critical Thinking: The writer presents a balanced argument, considering multiple aspects of the issue before reaching a nuanced conclusion.

Sample Essay 2 (Band 6-7)

Currency devaluation is a topic that many economists debate about. Some people think it’s good for a country’s economy, while others believe it can cause problems in the long run. This essay will look at both sides of the argument and give my opinion.

On one hand, devaluing a currency can help a country sell more products to other countries. When a country’s money is worth less, its goods become cheaper for foreign buyers. This can lead to more exports and create jobs in factories that make things for other countries. Also, when foreign products become more expensive, people might buy more local goods, which is good for the country’s businesses.

However, there are also problems with devaluation. One big issue is that it can cause prices to go up inside the country. When imported goods cost more, it can make everything more expensive, which is bad for people living there. Another problem is that other countries might not want to invest money in a place where the currency keeps losing value. This can make it hard for businesses to get money to grow.

Effects of inflation on investments can be significant, as rising prices may reduce the real value of returns, impacting both domestic and international investors.

Pros and cons of currency devaluation

In my opinion, while devaluation might help in the short term, it’s not a good long-term solution. I think countries should focus on making better products and improving their industries instead of just trying to make their money cheaper. This way, they can compete in the global market without risking the problems that come with devaluation.

To conclude, currency devaluation is a complicated issue with both good and bad points. While it can help exports, it also has risks like inflation and less foreign investment. I believe that countries should be careful about using this strategy and look for other ways to improve their economies.

(Word count: 345)

Essay 2 Analysis (Band 6-7)

This essay demonstrates the characteristics of a Band 6-7 response:

1. Task Achievement: The essay addresses all parts of the task, discussing both views and providing an opinion. However, the ideas could be developed more fully.

2. Coherence and Cohesion: The essay has a clear structure, but the use of cohesive devices is less sophisticated than in the Band 8-9 essay.

3. Lexical Resource: It uses some topic-specific vocabulary, but the range is more limited compared to the higher band essay. There’s less precision in word choice.

4. Grammatical Range and Accuracy: The essay uses a mix of simple and complex sentences, with some errors that don’t impede communication.

5. Critical Thinking: The essay presents both sides of the argument, but the analysis is less nuanced and the examples are more general compared to the Band 8-9 essay.

Key Vocabulary to Remember

1. Currency devaluation (noun) – /ˈkʌrənsi diːˌvæljuˈeɪʃən/ – The deliberate downward adjustment of a country’s currency value.

2. Trade balance (noun) – /treɪd ˈbæləns/ – The difference between a country’s imports and exports.

3. Inflationary pressure (noun) – /ɪnˈfleɪʃənəri ˈpreʃər/ – Forces that cause prices to rise in an economy.

4. Foreign investment (noun) – /ˈfɒrɪn ɪnˈvestmənt/ – Money that people or businesses from other countries spend on businesses in a particular country.

5. Economic stability (noun) – /ˌiːkəˈnɒmɪk stəˈbɪlɪti/ – A situation in which an economy does not experience extreme fluctuations.

6. Export competitiveness (noun) – /ˈekspɔːt kəmˈpetɪtɪvnəs/ – The ability of a country’s goods to compete in international markets.

7. Purchasing power (noun) – /ˈpɜːtʃəsɪŋ ˈpaʊər/ – The ability of a currency to buy goods and services.

8. Volatile (adjective) – /ˈvɒlətaɪl/ – Likely to change suddenly and unpredictably.

9. Productivity (noun) – /ˌprɒdʌkˈtɪvɪti/ – The rate at which goods are produced or work is completed.

10. Sustainable (adjective) – /səˈsteɪnəbl/ – Able to be maintained at a certain rate or level.

In conclusion, the topic of currency devaluation and its effects on international investments is a complex but important subject for IELTS candidates to understand. By studying these sample essays and analyzing their strengths, you can improve your ability to write coherent, well-structured responses that demonstrate a good grasp of economic concepts.

To further enhance your skills, try writing your own essay on this topic or related ones, such as:

• The impact of global economic crises on developing countries
• The role of international trade agreements in shaping national economies
• The pros and cons of adopting a single global currency

Remember to practice regularly and focus on developing your vocabulary, grammatical range, and critical thinking skills. Feel free to share your practice essays in the comments section for feedback and discussion with other learners. Good luck with your IELTS preparation!