Of course, a free fall in a currency is not a good sign, particularly if the country has substantial foreign debt and does not have a manufacturing base for exports that can benefit from a cheap exchange rate. The ideal mix is a market-determined cheap currency in a stable financial environment underpinned by low inflationary expectations: That combination will give local businesses the confidence to build, banks the confidence to disburse loans at reasonable rates, and investors the confidence to make long-term commitments to the rise of a nation.
