This chapter reviews the foreign exchange losses suffered by LDCs, HIPCs, and SVS through the sustained weakness in relative prices of primary commodities. Falling real prices of commodities have caused lower purchasing power of primary exports, on which most of these countries rely predominantly for financing their imports. The resultant foreign exchange losses relative to the total primary and merchandise exports of many of these countries are quite substantial.
Keywords: foreign exchange losses; real prices; purchasing power; primary exports; merchandise exports
Chapter. 4689 words. Illustrated.
Subjects: Economic Development and Growth
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