Currency depreciations risk intensifying food, energy crises

The shrinking value of the currencies of most developing economies is driving up food and fuel prices in ways that could deepen the food and energy crises that many of them already face, according to the World Bank's latest Commodity Markets Outlook report.

In US dollar terms, the prices of most commodities have declined from their recent peaks amid concerns of an impending global recession, the report documents.

From the Russian invasion of Ukraine in February 2022 through the end of last month, the price of Brent crude oil in US dollars fell nearly 6 percent.

Yet, because of currency depreciations, almost 60 percent of oil-importing emerging-market and developing economies saw an increase in domestic-currency oil prices during this period. Nearly 90 percent of these economies also saw a larger increase in wheat prices in local-currency terms compared to the rise in US dollars.

[World Bank, Oct 26, 2022]