Going Down With the Dollar: The Cost to Developing Countries of a Declining Dollar

Publication Date: September 2004

Publisher: Center for Economic and Policy Research

Author(s): Mark Weisbrot; David Rosnick; Dean Baker

Research Area: Banking and finance

Keywords: Devaluation; Trade liberalization; Federal deficit

Type: Report

Coverage: United States


In the years since the East Asian financial crisis in 1997, many developing countries have sought to increase their holdings of foreign reserves to protect their currencies against financial instability. This paper shows that, because the dollar is overvalued, this strategy may actually increase risks.