What advantages might accrue to a country from overvaluing and undervaluing its currency?

Answer 1

If a country undervalues currency it must by definition overvalue the price if imports so it will have a trade surplus. It works much like having a tariff but the government doesn't get the money, the importing companies do. It prevents domestic industries from having to compete with foreign companies on a flat playing field. Countries that are trying to industrialize often protect relatively inefficient domestic industries from competition.
Country that overvalue their currency will put its exporting companies at a competitive disadvantage but what they do export will earn excess profits. It is not sustainable unless it can attract foreign investments because the balance of payments must be zero.

Answer 2

In the long run, there are no advantage, only disadvantages.

In the short run, by overvaluing it, you can buy goods and services from other countries at a lower cost. You can borrow money now in your currency from other countries and pay it back when the currency value is corrected. that way, you end up winning.

On the other hand, by undervaluing, you can sell you products to other countries more competitively. This can help grow you employment and economy for a short while.

Answer 3

Countries with high quality products can benifit from undervaluing their currency because they can export thes items and earn high valued currency as reserves. Eg. Japan.
On the contrary a country with low quality products manufactured will not gain much from undervaluing their currency since they won't have anyone to buy their product.Eg. India.
Other countries would like to have strong currency policy in place because of many leadership areas it covers, like technology, manufacturing, education etc; so that they can maintain their leadership position and have purchasing power for it's citizen. Eg. USA.