How can exchange rate policy stimulate aggregate demand if there is recession?

During a recession, there is an inefficient use of
resources both in terms of labor which can be seen from the fact that unemployment rises
and in terms of other resources with factories lying shut down and machinery not being
used.

To stimulate aggregate demand, it is essential to
bring in more money into the country. The money in the hands of people would allow them
to start buying more goods and services and hence boost consumption of the produce of
domestic industry. This increases the money available with people more and a cycle out
of recession is created.

The exchange rate determines
whether a country's goods and services are bought by people in other countries. If your
country can deliver the same product at a price less than what can be delivered by
another country, your exports are going to rise. A way to do this is to decrease the
value of your currency and allow citizens of country X to get 10 dollars with one unit
of their currency instead of 1 dollar. Now, they can easily buy a product that you
export which is worth $10. This boosts demand for your exports. Also, as people find
importing products exorbitantly expensive, it would increase their consumption of goods
manufactured by industries within the country.

In this way
the exchange rate policy can stimulate aggregate demand during a
recession.