Who wins when global currencies tumble?

The Brazilian real has lost 28% against the dollar just this year. The Turkish lira 20%, Colombian peso 23% and the Indonesian rupiah is down 11% versus the dollar in 2015, CNN reports. On the face of it, these are alarming moves. Yet, a lower currency value is something that some countries actually want. China, for instance, devalued the yuan by 2% last month, its largest move in two decades. Experts believe the prime motivation was to make the country's exports more attractive to international buyers. Certainly, a weak currency helps boost exports, which can ultimately lift the economy. "I wouldn't be surprised if we're saying in two years that this currency weakening paved with the way for better economic performance," says Neil Shearing, chief emerging markets economist at Capital Economics. However, in the short term a falling currency is also a reflection of weakness in underlying countries. In fact, the dramatic global currency declines are raising the specter of the Asian financial crisis of 1997, which was triggered by the devaluation of the Thai baht, that fell 20% in one day. That crisis reverberated worldwide sending international stock markets to record lows and shook investors' confidence in the region for over a decade.

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