Weak Currency Wont Help Oil Hit Nations

[Economy 52,861]

http://www.bloomberg.com/news/articles/2015-11-04/this-time-is-different-why-russian-recovery-won-t-look-like-one

 

It is always said a weaker currency helps with exports by making you more competitive. The currencies of major oil exporters has fallen sharply in last 2 years with the article focusing mostly on Russia. Just to list a few:

 

Canadian Dollar: 29% Decline

Mexican Peso: 32% decline

Russian Ruble: 44% decline

Venezuela: 60% decline

 

So will low currency help exports? No! The problem with most of these Nations is that the manufacturing sector hardly exists to begin with so theres no companies to take advantage of lower currency. A low currency is only bad then because it raises costs of imports without benefits of more exports.

 

Canada & Norway may be exeptions among big oil exporters having larger non-energy export volumes. However its manufacturing sectors still remain troubled despite lower currencies.