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However, it raises import costs.
A large depreciation raises import costs which can feed through to inflation.
Firms are already complaining of a rise in the cost of materials as the weak pound raises import prices.
A plunging currency raises import prices, sometimes substantially, which can fuel inflation in economies in which expectations are less well-anchored.
Similar(56)
The 20% drop in the yen against the dollar over the past year will help not only to boost exports but, more important, to raise import prices and prevent deflation.
Russia has raised import duties on vehicles.
Russian automakers have lobbied hard to raise import tariffs.
But South Korea recently raised import duties on garlic to 315percentt.
In the short-run, the removal of OECD subsidies would indeed raise import costs.
He also wants to raise import duties on crude oil, petroleum and diesel between 5 percent and 10 percent.
But there was also evidence the weak pound was stoking inflation by raising import costs.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com