With many countries now facing an economic slowdown, some are trying to find ways to offset a decline in exports. In the past, countries would turn to higher tariffs or import bans, combined with export stimulation, to deal with this. Not major devaluations, but these are large economies, sure to put pressure on the administrations of countries like Malaysia, Thailand, China, Chile, and Argentina. So far, these currency declines have not caused much worry. It' s the attitude that is more worrisome.
Devaluation is a dangerous and destructive game.
Though favored by the IMF, and other ivory tower economists divorced from economic reality, devaluation harms economies. Few remember that the Thai market actually surged just after the Baht devalued. Government officials initially heralded the devaluation as a positive move and the IMF stupidly reinforced the thinking. It sounded so good that many other Asian countries followed, and neither investors nor economists were able to predict the economic disaster that would come as a result of devaluation. The fact is, most people are hurt by devaluation.