Asian, Russian and now Brazilian firms have gained a competitive edge from falling exchange rates.
It leaves China vulnerable to low US interest rates and a falling exchange rate.
But the British "were hit badly by the falling exchange rate between the pound and euro, in which most properties here are priced," Ms. Cvjetkovic noted.
He warned that deep budget cuts on top of the falling exchange rate would lead to "an insidious grinding down of the UK research community".
Banks that accept dollar deposits from Indians abroad will now be encouraged to swap those into rupees – the RBI will offer what amounts to a subsidised currency hedge so that they are not exposed to a falling exchange rate.
Countries that managed to grow strongly in the past while cutting budget deficits were often aided by a falling exchange rate or were rewarded by a big drop in borrowing costs.
Their problem (a big one in Hungary, a lesser one in Romania and Poland) is that falling exchange rates may bankrupt the firms and households which have, in past years, taken out unwise loans in foreign currencies, chiefly euros and Swiss francs.
Industries like tourism, wine (see article) and education are gasping.Some believe the current boom could end as soon as 2014, if inflation takes off in America, leading to declining terms of trade and a falling exchange rateSpecial report No worries?
This could happen if strong-currency countries react to falling exchange rates by raising import barriers against "competitive devaluations".It would be hard to ensure that delaying the single currency even for a short time did not turn into an indefinite postponement.
But the markets tumbled again on this week's poll news.Since much of Brazil's public debt is tied either to its falling exchange rate or its high interest rates, the debt burden has risen from 53% to 62% of GDP in the past year.
That conclusion, first spelled out in this late 2013 report, is based on two arguments for thinking that falling exchange rates are no longer to be feared.The first is that Latin American and Caribbean countries, like other emerging markets, have been gradually weaning themselves off dollar-denominated lending.
