{"id":597046,"date":"2019-07-15T04:18:59","date_gmt":"2019-07-15T04:18:59","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2019\/07\/15\/does-currency-devaluation-actually-increase-exports-in-emerging-markets\/"},"modified":"2019-07-15T04:18:59","modified_gmt":"2019-07-15T04:18:59","slug":"does-currency-devaluation-actually-increase-exports-in-emerging-markets","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2019\/07\/15\/does-currency-devaluation-actually-increase-exports-in-emerging-markets\/","title":{"rendered":"Does currency devaluation actually increase exports in emerging markets?"},"content":{"rendered":"

<\/a> Currency devaluation increases exports, right? Not always.<\/b> The depreciation of emerging-market currencies may actually result in falling exports, research by the Bank of International Settlements<\/a> (BIS) and the FT<\/a> suggests. Conventional wisdom tells us that a weakening currency makes exporters more competitive in the international market, causing an increase in orders and boosting economic output. But as the above chart illustrates, some emerging markets saw only a meager rise in exports last year, even though local currencies depreciated against the USD in 2016. Colombia even saw exports shrink, despite the COP losing around 10% of its value. Classical economic theorists may pat themselves on the back when looking at Egypt\u2019s impressive export volumes, but only manage a shrug when it comes to explaining the fates of South Africa, Taiwan and Peru.<\/p>\n

What\u2019s going on?<\/b> The BIS pinpoints five factors that can depress export growth in EMs during currency devaluation:<\/p>\n