As the Turkish lira went into meltdown last week, one consolation for the country’s businesses might have been that, while their foreign currency debts were becoming harder to service, at least their products were becoming more competitive on export markets. By conventional wisdom, the same should be true for businesses in Argentina, Brazil, Russia, SA and other places that have seen their currencies fall against the US dollar in 2018. Yet the data persistently fail to show any advantage gained by exporters from a weakened currency. Indeed, for both trade and investment, traditionally the twin engines of emerging-market growth, the strengthening dollar looks certain to be bad news. Back in 2015, EM Squared compared movements in 107 currencies with real or forecast changes in trade and found that, on balance, a weaker currency was followed by a decrease, rather than an increase, in export volumes. We have run the data again, for 125 countries this time. Comparing trade volumes in the...

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