The International Monetary Fund cautioned that monetary policy easing are unlikely to lead to currency devaluations that are adequate enough to cause a sustained improvement in a country's trade balance.
"One should not put too much stock in the view that easing monetary policy can weaken a country's currency enough to bring a lasting improvement in its trade balance through expenditure switching," IMF Chief Economist Gita Gopinath and researchers Gustavo Adler and Luis Cubeddu said on Wednesday in a blog post on the institution's website. "Monetary policy alone is unlikely to induce the large and persistent devaluations that are needed to bring that result," they added.
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Business News
May 08, 2026 15:50 ET Manufacturing and services sector survey results and labor market data from main economies were the highlight on the economics news front this week. Factory orders and jobs report dominated the news flow in the U.S. Similarly, industrial production data from German garnered attention in Europe. In Asia, purchasing managers’ survey results from China and the central bank decision from Australia were in focus.